News: 2009 Press Release
For Release: August 28, 2009
Media Calls Only: 916-492-3566
Small Business, Consumer Groups Support Commissioner Poizner's Effort to Stop Unconstitutional $1 Billion Sale of State Fund Assets
Following yesterday's announcement that Commissioner Steve Poizner would file a lawsuit to have the $1 billion sale of State Compensation Insurance Fund assets declared unconstitutional, small businesses and consumer groups have hailed Commissioner Poizner's "leadership" and said that he is "right to demand a halt to the Governor's plans."
"Small businesses are the most vulnerable to any hikes in workers' compensation insurance rates," said Betty Jo Toccoli, president of the California Small Business Association. "We understand the need for workers' compensation insurance and we are willing to pay what is necessary to ensure that our injured workers get quick and adequate medical care. However, what we will not stand for is the state taking money we have paid in premiums to care for our injured workers for use elsewhere in state government. If there is excess money, that money should be rebated to the policyholders as has been done in the past. We commend Commissioner Poizner's efforts to halt the transaction and prevent what will be an inevitable hike in our rates. He has shown real leadership in taking on the Governor and the legislature to stop this budget sham from further damaging California's business climate."
Consumer Watchdog's president Douglas Heller also issued a statement supporting Commissioner Poizner's efforts.
"The Insurance Commissioner and Department of Insurance regulators play a vital role in protecting policyholders and the health of the insurance market," said Heller. "When Californians made the Commissioner an elected office through Proposition 103, they ensured that the insurance industry would be overseen by a public official accountable to the voters. The Schwarzenegger administration's budget plan to put the State Fund up for sale is exactly why the voters had it right when they made the Commissioner independent. Ordering the State Fund to dispose of assets in order to close a budget hole without the Commissioner's oversight could be disastrous, especially since the Governor's goal is quick cash. Without the Department's expertise, the Governor's office could unwittingly sell it off in a way that endangers policyholders, both those with current SCIF policies and those who will need SCIF to be there in the next crisis, when only a hollowed out SCIF remains. Selling SCIF at fire-sale prices could further destabilize the workers' comp market in California, and Commissioner Poizner is right to demand a halt to the Governor's plans."
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