BILL ANALYSIS Ó
SB 1451
Page 1
Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 1451
(Mendoza) - As Amended June 14, 2016
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|Policy |Insurance |Vote:|13 - 0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill allows the board of directors of the State
Compensation Insurance Fund (SCIF) to appoint up to 40
additional executive and management positions, and sunsets this
authority on December 31, 2021.
FISCAL EFFECT:
Negligible state costs. SCIF is a quasi-governmental entity, but
it is funded by policyholder premiums and investment earnings
from those premiums, not state funds. SCIF reports that in some
SB 1451
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cases, the ability to create exempt positions instead of relying
on consultant contracts could provide administrative cost
savings.
COMMENTS:
1)Purpose. According to the author, the SCIF board needs the
flexibility to create additional exempt management positions,
allowing it the ability to avoid hiring costly and ultimately
temporary consultants, without having to come to the
Legislature to approve each new position. The author
indicates this flexibility will allow the organization to
respond more quickly to the market and accelerate progress
through a multi-year business transformation that more
effectively supports California's workers, economy, and
businesses by creating more stability in the marketplace.
2)SCIF Governance and Operations. SCIF is California's largest
provider of workers' compensation insurance. It was created
by the Legislature in 1914 in order to ensure all businesses
had an option for workers' compensation coverage when it
became mandatory for businesses to provide coverage, and has
grown since that time. It typically covers about 12% of the
market, but has covered as much as 50% of the market. The
State of California provides workers' compensation through
SCIF. The SCIF board has 11 voting members, nine of which are
appointed by the Governor, while the remaining two members are
legislative appointees. The board also includes the
Department of Industrial Relations Director as a non-voting
"ex-officio" member. As a major player in the workers'
compensation insurance marketplace, SCIF has similar demands
for executive and managerial talent, as well as subject matter
expertise, as a large private-sector insurer.
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3)Support and Opposition. This bill is supported by SCIF, and
opposed by California Attorneys, Administrative Law Judges and
Hearing Officer in State Employment (CASE).
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081