BILL ANALYSIS Ó
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THIRD READING
Bill No: AB 1394
Author: Assembly Insurance Committee
Amended: As introduced
Vote: 21
SENATE INSURANCE COMMITTEE : 9-0, 6/26/13
AYES: Calderon, Gaines, Corbett, Correa, Knight, Lieu, Nielsen,
Roth, Torres
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 76-0, 4/18/13 (Consent) - See last page for
vote
SUBJECT : State Compensation Insurance Fund: executive
appointments
SOURCE : State Compensation Insurance Fund
DIGEST : This bill authorizes the Board of Directors (Board)
of the State Compensation Insurance Fund (SCIF) to appoint a
chief medical officer, a chief actuarial officer, a chief claims
operations officer, and a chief of internal affairs, and make
those positions subject to the Milton Marks Postgovernment
Employment Restrictions Act of 1990 (Act).
ANALYSIS :
Existing law:
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1. Establishes the SCIF, a quasi-state agency, for the purpose
of transacting workers' compensation insurance and insurance
against the expense of defending any suit for serious and
willful misconduct, against an employer or his/her agent, and
insurance to employees and other persons of the compensation
fixed by the workers' compensation laws for employees and
their dependents.
2. Requires the SCIF Board to appoint a president, a chief
financial officer, a chief operating officer, a chief
information technology officer, a chief investment officer, a
chief risk officer, and a general counsel.
3. Exempts those positions from provisions of the Government
Code (GOV) and Public Contract Code (PCC) that are otherwise
applicable to state agencies and public entities.
4. Prohibits former employees of a state administrative agency
from representing for compensation another person before the
governing body on which they served, within the one-year
period after leaving that office or employment position.
(Milton Marks Postgovernment Employment Restrictions Act of
1990, GOV Section 87406 et seq.)
This bill:
1. Authorizes the Board of SCIF to appoint four additional
exempt employees:
A. Chief medical officer;
B. Chief actuarial officer;
C. Chief claims operations officer; and
D. Chief of internal affairs.
2. Subjects these new positions to the Act.
Background
SCIF . SCIF was created in 1914 to help ensure all employers
have a strong and stable option for their workers' compensation
needs. Today, it is the largest provider of workers'
compensation insurance in California, providing workers
compensation insurance to any interested employer, including
those that are unable to self-insure or find private sector
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alternatives. Because SCIF is a quasi-public entity, it has
significant autonomy in its internal governance but is bound by
civil-service hiring provisions of the GOV and PCC. Certain
positions are exempt from civil-service requirements and may be
appointed by SCIF's Board.
Proposed positions . According to SCIF, the proposed positions
will have the same powers and authority as the seven existing
exempt positions. They will be appointed by the Board and will
be executive positions with program managers reporting directly
to them. The positions will be eligible for benefits through
the California Public Employees' Retirement System and will have
the same benefit package as existing exempt positions. More
specifically, the proposed exempt positions are described as
follows:
Chief actuarial officer . Will manage and oversee all
actuarial functions at SCIF. Responsibilities will include
setting reserves and rates - two areas that are critical to
the long-term operation of an insurance company.
Chief medical officer . Will administer the Medical Provider
Network (MPN) and Utilization Review (UR) programs.
Qualifications will include a medical degree and previous
experience managing MPN and UR programs.
Chief claims operations officer . Will oversee SCIF's claims
operations ensuring compliance with performance and strategic
goals, and regulatory and legislative requirements.
Responsibilities will also include identifying opportunities
to improve the California workers' compensation system.
Chief of internal affairs . Will oversee the Internal Audit,
Governance, Compliance and Privacy and the Special
Investigation Unit functions and reports directly to the
Audit Committee of the Board of Directors and
administratively to the general counsel. Qualifications
include previous experience in audit, internal controls and
risk management with certification as a Certified Internal
Auditor, Certified Government Auditing Professional, or
Certified Public Accountant.
Prior Legislation
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SB 1145 (Machado, Chapter 344, Statutes of 2008) authorized SCIF
to employ six additional "exempt" employees, and requires SCIF
to comply with the "Open Meetings" Law, subject to certain
exceptions.
SB 1406 (Emmerson, 2012) would have allowed the SCIF Board to
appoint up to 20 positions exempted from the civil service
appointment system. Died on the Senate Appropriations Committee
Suspense File on May 24, 2012.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 8/12/13)
State Compensation Insurance Fund (source)
ARGUMENTS IN SUPPORT : This bill's sponsor, the State
Compensation Insurance Fund, states that it must be able to
attract and retain industry experts to fulfill its mandated role
as a viable, competitive option for California employers. It
contends that it has not been able to find the talent it needs,
such as medical directors, actuaries and other industry experts,
within the civil service system.
ASSEMBLY FLOOR : 76-0, 4/18/13
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,
Blumenfield, Bocanegra, Bonilla, Bonta, Bradford, Brown,
Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway,
Cooley, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gordon, Gorell,
Gray, Grove, Hagman, Hall, Harkey, Roger Hernández, Jones,
Jones-Sawyer, Levine, Linder, Logue, Maienschein, Mansoor,
Medina, Melendez, Morrell, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, V. Manuel Pérez,
Quirk, Quirk-Silva, Rendon, Salas, Skinner, Stone, Ting,
Torres, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams,
Yamada, John A. Pérez
NO VOTE RECORDED: Holden, Lowenthal, Mitchell, Vacancy
AL:k 8/13/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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