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JUST PUBLISHED
From the Industry Watch Dog - Workers’ Comp Executive Newsdesk newsdesk@wcexec.com
PART 1
Candidates and Qualities for A New State Fund Head?
The State Compensation Insurance Fund is continuing its months long search for a new president after its last abruptly departed the carrier back in November. After nearly 6 months no replacement has been found. And, down a few paragraphs, we’re asking our readers what qualities they think might be needed (serious or funny) for such a position?
But the reasons for the instant departure - in the middle of a board meeting - of its last CEO/President and its CFO are being kept top secret. As far as we can tell the Board has kept its collective mouth shut, so not even a credible leak. But the suddenness of such a departure is certainly a question any incoming candidate would want to know about. Is there an investigation or a cover up or was it simply operational disagreements?
Despite numerous requests from Workers’ Comp Executive, State Fund has steadfastly refused to release a copy of the request for proposals (RFP) that issued in order to identify a recruiting firm to recruit the new president. SCIF also refuses to release details of the resulting contract. We find that unusual since the pay will be public and the fees for such endeavors are standard within some parameters. Keeping these kinds of details secret simply prevents a fair evaluation of the Boards performance. But we found out.
In case you want to apply, Workers’ Comp Executive has confirmed that Michael Parkington working out of the Stamford, Conn. office of headhunting firm Spencer Stuart is spearheading the search. Parkington is a member of the search firm’s financial services practice.
But such an application may be - like it or not - an application for a temp position. Over the past nine years - yes, this is the fourth search for a president in less than 10 years - for State Fund - It’s first search produced Jim Tudor who was already a State Fund employee, but that regime lasted less than a year. The next search produced the well regarded Janet Frank who choose to leave in just over two years and then Tom Rowe who left under mysterious circumstances after just over three years.
How much this latest search is costing State Fund is still unknown, but it’s likely well into the six-figure realm. In the past State Fund paid its headhunter roughly $100,000 plus travel expenses for the recruiters and candidates for each search, as well as fees for additional services such as conducting a salary survey.
Who’s in the Running?
Names we’ve heard as potential candidates include Neal Conolly, a consultant who has done work for SCIF in the past, Rick Baum, who was Chief Deputy Commissioner under Garamendi, and who has run both small insurance carriers and bureaucracies, Christine Baker, current head of the California Department of Industrial Relations and who sits on SCIF’s board, Jim Little a well known California workers’ comp insurance carrier president now a consultant, Bill Mudge, president of the WCIRB, Don Smith, the current president of the Arizona State Fund, and Tommy Gleason who was president of the New York State Fund. We aren’t saying any of these people has applied, is interested, or would (or would not) be considered but they are names to add to the mix.
Qualities?
Workers’ Comp Executive ask readers to tell us what qualities you think are needed for such an officer, and we’ll run a story with your responses (no names will be used unless you specifically tell us they can) tomorrow. Feel free to be serious or funny. We’ll turn them into a flash for tomorrow. Reply to this email or send them to feedback@wcexec.com
The secretive fashion in which this government agency operates goes a long way towards creating the kind of secretive culture that no public agency should operate in and one in which cover ups, illegal contracting, personnel irregularities and other misdeeds can thrive in. It was codified under the guise of not sharing secrets with its competitor carriers. Perhaps the time has come again to have another look at what’s really going on behind the scenes at State Fund.
Commentary filed by Dale Debber in Sacramento.
PART 2
Qualities for President of State Fund - Industry Responses
Note: We had so many responses to our request for suggestions about the qualities needed in a State Fund president that it took a little longer to write than I’d expected. We had many funny ones, some just plain sad ones, and many serious suggestions and ideas from SCIF employees, brokers and customers. Today we address the funny side, next week, out of respect, the serious side.
The State Compensation Insurance Fund (SCIF or State Fund) continues its months long recruiting efforts for a qualified president. The successful candidate, if indeed anyone could be successful, must be able to work side by side with a General Counsel who tried for but didn’t get the job. In addition you will have a new CFO because the last one left with the president during a board meeting.
The ever increasing labor makeup of the Board does not have and therefore doesn’t require an understanding of insurance company financials because dealing with rates which fail to contemplate reality, a successive string of underwriting losses, [$723M, $645M, $580M, $334M, $302M] while trying to live up to the statutory requirement of being “fairly competitive” with other carriers is really too much to ask of a president. Of course, presiding over solving the decreasing market share problem by low ball tier pricing appears to be a board requirement you just have to live with.
The ability to squander policyholders’ surplus for no good reason is a must.
A deep understanding of insurance company financials concerning decreasing reserves, and financial market conditions leading to falling income on surplus and reserves, which, when combined with an overburdened staff, antique systems and procedures, produce results which are nothing to be proud of will lead to frustration. The candidate will have to either rise above this or more likely simply not care about it.
Experience dealing with Civil Service and unionized state employees is a must because navigating the system requires much patience and a penchant for nonchalant ignoring of the personnel situation. Must be smart enough to suggest managers transfer non-performers into other departments in order that other department heads share the apparently team building experience with them. The Ability to stand in front of the work force and lie through one’s teeth while creating chaos without regard to benefit or lack thereof to work force, bottom line, or mission is required.
A new president will preside over a broken and overburdened claims department which fails to catch fraud until its too late to take off employers X-Mods, fails to timely report, has systems which do not work and creates poor interactions employers and brokers.
This of course informs the requirement that a president is required to live in a mushroom like condition based upon large bovine droppings including explanations and excuses.
Therefore many of the qualities possessed by former California governor Gray Davis are a desirable bonus.
A new president will face ever-increasing disgust from a distribution system, which has faced poor service in quoting, pricing, claims, audit, and billing.
And, of course, the main attraction: Bureaucracy Bureaucracy Bureaucracy.
I’m sure that there is more to come as SCIF and the secrets of management are exposed.
www.scif.com
