Poizner questions selling State Fund assets - Los Angeles Business from bizjournals:

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“I am troubled by the details of the Poizner said in comments released to the San Francisco Business Timeson Thursday. “It specifically removes my participation from a transactionh that affects a company that writes more than one out of evertyfive workers’ compensation policies and is the largest insurancee company in the state.” Schwarzenegger’s proposal suggests that a sale of unspecifiede assets could raise $1 billion, but therer are no indications that the number corresponds to any specific tangible interest by would-be buyers.
who was pointedly left out of discussionas about theproposed sale, as was state Attornegy General Jerry Brown, said a “hasthy or ill-considered sale could wreak havoc on the already-volatile compensation market.” The governor has proposed selling assetes of San Francisco-based State Fund to help fill the state’z looming $24.3 billion budget Schwarzenegger’s revised budget, rejiggered after California voterw rejected a bevy of ballot propositions last month intendeed to right the state’s fiscal ship, is now beinyg considered by the state Legislature.
State Fund, California’sa insurer of last resort in the workers’ comp saw its share of the state comp market soar above 50 percent in the early yeards ofthe decade, when many private insurers stopped writinbg new business here. It still controlled abougt 23 percent of the market last selling closeto $1.7 billion in It covers an estimatee 180,000 or so small businesses, many of whic would have trouble finding affordable comp coverage from otherr carriers, according to Poizner and insurance industrgy sources.
In his statement to the San FranciscoiBusiness Times, Poizner mentioned construction firms and smal l farms as businesses that often cannot find coverage in the privatd market. “Any sale would have ramificationsthroughout California’s business affecting the availability and cost of compensation insurance for all (of) California’ss employers,” said Poizner, a Republican who is a contendere for his party’s nomination to replace who cannot run for reelectioh due to term limits. “Great care must be takenh to ensure that a sale of Statw Fund assets does not place additional stresson California’x already-reeling economy,” Poizner said.
Rachel a spokeswoman for the governor’s office, told the Businesse Times earlier this weekthat Schwarzenegger’s proposal is basefd on a determination to maintain a souncd workers’ comp system in California, keep at least part of Stated Fund intact, “and achieve the highest value for the state.” But some insurancse industry executives agree with Poiznef that the sale of a portion of State Fund coulr be risky. “It’s kind of Dave De Wenter, executive vice president and COO ofthe Torrance-based told the Business Times earlie in the week, predicting that such a sale coule turn into a huge boondogglee and damage State Fund’s financialo stability.
“It just sounds crazu to me,” Scott president of the Smalo Business Californiaadvocacy group, who also runs a San Franciscoo insurance brokerage that sells State Fund policies, in commentsz to the Los Angeles “Most of the smalol businesses that are with State Fund are therse because they can’t go anywhere If they are a more risky type of business, their ratexs will go way up.
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