BILL ANALYSIS �
SENATE INSURANCE COMMITTEE
Senator Ronald Calderon, Chair
SB 1406 (Emmerson) Hearing Date: April 11, 2012
As Amended: March 29, 2012
Fiscal: Yes
Urgency: No
SUMMARY Would permit the State Compensation Insurance Fund
(SCIF) board of directors to appoint up to 20 positions exempted
from the normal civil service appointment system.
DIGEST
Existing law
1.Provides for the existence of SCIF to be administered by a
board of directors 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 or 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 SCIF board of directors 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
and Public Contract Code that are otherwise applicable to
state agencies and public entities and for these purposes;
4.Provides that the SCIF is not considered a state agency or
other public entity.
This bill
1.Would require SCIF board of directors to appoint additional
SB 1406 (Emmerson), Page 2
positions, not to exceed a total of 20 positions, including an
administrator, senior management employees next in line of
authority to the positions specified above, subordinate
administrators with specialized training and knowledge, and
other legal staff.
COMMENTS
1. Purpose of the bill
To provide SCIF's board of directors the authority to
appoint additional exempt positions, not exceeding 20
positions total.
2. Background
SCIF is a quasi-public entity that is the largest provider
of workers' compensation insurance in California. SCIF
provides California's worker's compensation insurance to
any interested employer, including those that are unable to
self-insure or find private sector alternatives. SCIF was
created in 1914 to help ensure all employers have a strong
and stable option for their workers' compensation needs.
As a constitutionally authorized, quasi-public entity
created by the Boynton Act of 1913, SCIF has significant
autonomy in its internal governance but is bound by
civil-service hiring provisions of the Government Code and
Public Contract Code. Certain positions are exempt from
civil-service requirements and may be appointed by SCIF's
board of directors pursuant to Insurance Code section
11785.
3. Summary of Arguments in Support
a. According to SCIF, obtaining top notch senior talent
is critical to SCIF's mission of providing fair prices
and excellent service to California's employers, but it
has been unable to the hire necessary, highly-skilled
talent through the civil service system. SCIF currently
SB 1406 (Emmerson), Page 3
obtains these highly-skilled services through contracted
consultants, which are costly and do not promote
consistency. In order to compete with the private
insurance carriers to attract and retain high-quality
talent, SCIFF needs the flexibility afforded by exempt
positions.
b. SCIF also states that the requested positions,
including a computer modeler, medical direct, financial
services specialists, and specialized actuaries, require
rare and specialized skill-sets difficult to attract and
retain through the civil service system. SCIF has tried
to fill these positions through the normal civil service
recruitment system and has been unable to locate and hire
individuals that fill SCIFF's very specific needs.
4. Summary of Arguments in Opposition
None received
5. Questions
a. Should SCIF more clearly and definitively
articulate the positions required?
b. Could SCIF achieve its goals by establishing new
classifications within the civil service system?
6. Prior and Related Legislation
AB 1406 (Emmerson) (enacted as Chapter 393, Statutes of
2009) provided a template for SB 1406. AB 1406 expanded
the authority of the board of retirement of San Bernardino
County to appoint specified employee positions not subject
to the civil service system including supervisors and
employees with specialized training and knowledge in
pension benefit member services, investment reporting
compliance, etc.
POSITIONS
Support
SB 1406 (Emmerson), Page 4
State Compensation Insurance Fund (SCIF)/Sponsor
Opposition
None received
Consultant: Hugh Slayden, (916) 651-4773