BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
SB 1406 (Emmerson) - State Compensation Insurance Fund:
appointments.
Amended: May 15, 2012 Policy Vote: Insurance 5-1
Urgency: No Mandate: No
Hearing Date: May 24, 2012 Consultant: Bob Franzoia
SUSPENSE FILE.
Bill Summary: SB 1406 bill would require the State Compensation
Insurance Fund (SCIF) board of directors to appoint six
positions, including a claims medical officer, a chief actuarial
officer, a chief of internal affairs and three senior management
employees with specialized training and knowledge in
infrastructure engineering, data management and systems
engineering or applications.
Fiscal Impact: Major costs annually from the State Compensation
Insurance Fund.
Personnel costs ranging between $150,000 and $315,000 per
position, based on the current SCIF exempt pay scale, for
six new positions.
Background: The SCIF, a publicly run workers' compensation
insurer, was created in large part to act as the "insurer of
last resort" for California's workers' compensation insurance
system-insuring workers in occupations deemed too risky to be
insured by private-sector companies. The state also contracts
with SCIF to administer its workers' compensation insurance
program for state employees. In addition to these lines of
business, SCIF also competes with private-sector insurers,
Insurance Code 11781 delegates administrative authority to the
board. The board provides the Department of Finance with an
actual personnel position count and an estimate of future year
costs. SCIF has what is referred to as a special display in the
Governor's Budget which does not include salary and wages (a
display of position classifications and related salaries). SCIF
personnel positions and salaries do not require Department of
Finance approval.
SB 1406 (Emmerson)
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Proposed Law: SB 1145 (Machado) Chapter 344/2008 authorized the
board to appoint a chief financial officer, a chief operating
officer, a chief information technology officer, a chief
investment officer, a chief risk officer and general counsel.
The board was authorized to appoint a president in 1935/1945.
This bill would authorize the board to appoint six specified
positions and set the salary for each position. These positions
would not be subject to otherwise applicable provisions of the
Government Code and the Public Contract Code.
Preliminary information indicates the compensation range for the
SCIF president is $37,500 to $48,780 a month. The compensation
for the SCIF chief operating officer is $13,000 to $17,000 a
month, the lowest compensation of the positions authorized by
Chapter 344/2008. Likely similar compensation ranges would be
adopted for the positions proposed to be authorized.
Based on current compensation for the positions authorized by
Chapter 344/2008, monthly salaries would range from $13,000 to
$26,265. At a mid-range monthly salary of $19,633, six
positions would have an annual cost of $1,413,540.
Preliminary information indicates these employees may opt into
the Public Employees Retirement System after three years of
employment.
The board is in the process of identifying additional positions
which may be added to this bill.
Related Legislation: SB 1513 (Negrete McLeod) would expand the
State Compensation Insurance Fund board's choice of investments
of excess moneys.
SB 1406 (Emmerson)
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