Calif. insurance regulator sues to block State Fund sale
Steve Poizner (R)
SACRAMENTO, Calif. (Legal Newsline)-California Insurance Commissioner Steve Poizner on Friday plans to sue the governor to stop efforts to sell $1 billion worth of a state-run workers' compensation insurance company's assets.
Republican Gov. Arnold Schwarzenegger and the Democrat-led Legislature approved the proposed sale to help bridge a $24 billion gap in the state budget.
But Poizner, a 2010 Republican candidate for governor, said the sale could lead to skyrocketing workers' compensation insurance costs for construction firms, agricultural industry and other small businesses.
"The pilfering of funds used to pay the claims of injured workers to instead help fill the state budget gap is both unconscionable and unconstitutional," Poizner said. "This $1 billion sale of SCIF assets could not only endanger the solvency of SCIF, but is a direct affront to the state's jobs and business climate."
Poizner said he plans to ask a Sacramento County Superior Court judge for an injunction preventing any sale of State Fund assets.
"In these tough economic times, the state should be doing everything possible to create jobs, not use budget gimmickry to hurt the economy," he said. "The Schwarzenegger administration simply got it wrong with their proposal and the Legislature failed to adequately scrutinize the consequences."
From Legal Newsline: Reach staff reporter Chris Rizo at firstname.lastname@example.org.