Santa Monica, CA — Consumer Watchdog’s Executive Director Douglas Heller issued the following statement about Insurance Commissioner Poizner’s announced suit to block the sale of State Compensation Insurance Fund (SCIF) assets.
“The Insurance Commissioner and Department of Insurance regulators play a vital role in protecting policyholders and the health of the insurance market. 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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Consumer Watchdog is a nonprofit, nonpartisan organization. The group’s founder, Harvey Rosenfield, is the author of Proposition 103.