Poizner sues over sale of workers’ comp insurance assets — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

Poizner sues over sale of workers’ comp insurance assets

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Steve Poizner, the California Insurance Commissioner and Republican candidate for governor, recently filed a lawsuit seeking to stop the sale of assets in the State Compensation Insurance Fund (SCIF). He contends efforts by the Legislature and Gov. Arnold Schwarzenegger to use the funds to balance the state budget are unconstitutional.

Poizner says the assets, worth $1 billion, were meant to pay for workers’ compensation claims.

Earlier this year, the state Legislature passed a bill authorizing Schwarzenegger to sell some of the fund’s assets to be used to balance the state budget. Poizner’s suit asked the Superior Court for the County of Sacramento to stop the sale.

If the sale goes forward, proceeds would be deposited in the state’s general fund.

During a news conference announcing the suit, Poizner stated, “This is wrong—it’s illegal, it will cause workers’ comp insurance rates to spike upwards and it will hurt small businesses throughout the state of California.”

Poizner argues that pulling $1 billion out of the state fund will weaken it significantly and could force the SCIF to raise rates as much as thousands of dollars per year per policy.

The suit also seeks to stop the transfer of the insurance commissioner’s powers to the director of finance. The complaint alleges that under the new law, the sale of SCIF’s assets will not need to be approved by the insurance commissioner. Instead, the director of finance need only consult with the state treasurer before selling off the assets.

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