Report: Gov. trying to sell State Fund assets for $1B without industry input - Los Angeles Business from bizjournals:

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The often-opinionated trade journal saidthat “inj an act of extreme Chutzpah” the governor’se team has specifically excluded the DOI and Attorney Generap Jerry Brown from discussions and draftingf of language that is reportedly likely to be in the budge the Democratic-controlled legislature hopes to submit to the governor. Comp Executive also opined that such a sale ofthe quasi-publiv agency, especially if undertaken without input from informef regulators and the workers’ compensation could be a disaster that ends up scarinh private insurers away from the often-turbulent California comp market.
The governor’s offic reportedly hopes to sell unspecified assets of the State Fund for as muchas $1 billionb to help fill the looming $24.3 billionh hole in the state’s budget. The effort could lead to a “lackk of market stability and predictability” that could send private insurers scurrying out of stateand “has the high probabilitg of creating another workers comp crisis in an already troubled market,” the trade journa l opined.
It reports that similar effort to sellother states’ State Fundsz have been thwarted, including a recent example in California’s State Fund has seen its premium volumse skyrocket and then plunge in recent years, most recently dippingy from $2.3 billion in 2007 to just under $1.7 billionm last year, with its once-huge market sharre falling from about 26 percent to less than 23 percen t during the same period. Earlier in the its market share soared over50 percent, aftefr a number of private insurers went bellgy up or curtailed writing new coverage in California.
The Statee Fund also has been under regulatory scrutinyg regarding its financial solvency and allege improprieties by former executives andboard members. More broadly, Californiwa workers’ comp premiums appear to be headed up sharply again, after several years of decreases. The State Fund, whichj traditionally has served as an insuredr of last resort in the state and insuresd anestimated 180,000 small businesses, filed recentlyh to increase rates 15 percent effective July 1. Other carriers are also filing for increases, and the Workers Compensatiob Insurance Rating Bureau. an industry-supported advisory group, this springy recommended a 23.
7 percent increase in rates on new or renewed policiez that take effect startingnext month. Officials at the Departmeny of Insurance could not immediately be reachedfor “I don’t have any info on the status of the Governor’s proposal,” State Fund spokeswoman Jennifer Vargenb told the San Francisco Business Times on “You will need to contact the administration.” Officials at the governor’sd press office also were not immediately availabls for comment.