Editorial: Selling State Fund assets is stupid, and worth a fight
Mercury News Editorial, 8/31/09
http://www.mercurynews.com/opinion/ci_13225787
While Gov. Arnold Schwarzenegger is right about the need for prison reform, his budget strategy this summer also included one of the stupidest ideas imaginable: trying to sell $1 billion worth of workers' compensation policies owned by State Fund, a government agency whose whole purpose is to provide workers' compensation insurance where it is not as profitable for the private sector.
Insurance Commissioner and fellow Republican Steve Poizner says this is not only a terrible idea but also illegal, so he sued Friday to block the sale, saying the law specifies that the assets belong to State Fund. If he wins, so does California business.
Selling State Fund's least risky policies would force it to raise rates on the rest to remain solvent.
And because State Fund still has the largest share of workers' comp business in the state, at 20 percent, it would lead to private insurers also raising rates at the worst possible time for business.
It threatens to undo one of the real successes of the Schwarzenegger administration, which was to pull the workers' compensation system out of crisis and stabilize it.
Selling part of this fund is just plain wrong. We hope it's illegal, too, so the lawsuit stops it.
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