Monday, August 31, 2009

Sale of a portion of SCIF opposed

The State Compensation Insurance Fund (SCIF) is considered an insurer of last resort and serves as an example for private companies. It is a workers’ compensation insurer which operates like a mutual insurance carrier.

This is why efforts to sell portion of SCIF by the state of California had been vehemently opposed by the insurance regulator.

Insurance Commissioner Steve Poizner planned to sue Gov. Arnold Schwarzenegger's administration to stop the sale. Poizner claimed that selling a part of the business or taking money from its assets violates the state's constitution. He added that even if the scheme was legal, it was a terrible public policy.

On the other hand, Rachel Cameron, spokeswoman for the governor, responded that the administration believed it can sell a part of the insurance business without affecting the costs.

Moreover, the office of the governor had reached a tentative two-year deal with the highway patrol officers to forgo pay raises. If approved by its 8,500 active members, the California Association of Highway Patrolmen would give up 0.5 percent pay raises for the next two years.

The depletion of SCIF would mean burden on injured workers. Before any move on its sale, the government should think and exhaust other option. It entails much burden if the proposed reason for sale does not transpire. In the end, it would be the injured workers who would suffer the most.

If you want to know more, consult an insurance attorney to give you an idea about SCIF and the effects of sale on you, if any.