NU Online News Service, June 24, 4:15 p.m. EDT
California Gov. Arnold Schwarzenegger is seeking authorization to sell off a portion of the state's workers' compensation insurer of last resort, a spokesperson for the governor said.
Rachel Cameron, deputy press secretary for the Governor's Office, said, "Given the state's current budget situation–including a $24 billion deficit–we are evaluating all assets to determine what is best for the state.
"It's important to note that we have put forth a proposal that will maintain a sound workers' comp system, continue with the fund as the insurer of last resort and achieve the highest value for the state."
The proposal states, "The director of finance is hereby authorized to act as agent for the state and, in that capacity, to sell a portion of or otherwise obtain value for the State Compensation Insurance Fund assets and liabilities to an entity" that the director determines meets certain qualifications.
The qualifications include an entity that can provide the highest price, the greatest security of payment and demonstrate competence in providing the workers' compensation services it buys.
Ms. Cameron said the proposal was originally put forth in the governor's May revision General Fund Proposals, which projected an estimated $1 billion for selling a portion of the State Compensation Insurance Fund (SCIF).
While the governor's proposal states, "Notwithstanding any other provision of law, neither the approval of the attorney general, insurance commissioner, nor the director of general services is required for execution and implementation of the sale or other disposition of the assets and liabilities of the [SCIF]…," Ms. Cameron said the governor looks forward to hearing from all sides on this issue.
"The Governor's Office has always been open and transparent in its proposal," she said, "and we welcome and look forward to a debate on it–but, we will not support anything that rolls back the governor's historic workers' comp reforms."
In any type of scenario that would see portions of SCIF sold, the entity would remain the state's insurer of last resort, according to the proposal.
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