The task force examining the state Injured Workers Insurance Fund recommended yesterday that the agency's governing board be expanded, and members hinted they'll abandon a proposal to exempt the agency from state ethics and public meetings laws.
The task force voted unanimously during a two-hour session to recommend that IWIF's board of directors expand from seven to 11 members to better manage the $1 billion operation. They rejected proposals to require that some of those board members have expertise in a particular field, such as insurance.
Under the proposal, which will be forwarded to the governor and the General Assembly early next year, the governor would retain the authority to appoint IWIF board members. The current seven board members would be allowed to serve out their terms.
After a presentation by John O'Donnell, executive director of the state Ethics Commission, panel members indicated they probably will not adopt a prior proposal to exempt IWIF from the state Ethics Law, a statute that requires board members to file annual disclosures of their financial holdings and avoid conflicts of interest.
IWIF also is required to comply with state public records and open meetings laws, and panel members indicated they'll likely retain that requirement.
"That just isn't going to fly," one task force member said of the exemption proposal, which had been pushed by Paul M. Rose, IWIF's president. Rose contends meeting the law's requirements puts IWIF at a competitive disadvantage.
Task Force Chairman Karen Johnson, an aide to Gov. Parris N. Glendening, said a decision on whether the panel will recommend exemptions for IWIF from the public records and ethics statutes could occur at a future meeting. In previous sessions, task force members voted to support such an exemption.
"We'll need to sort through everything that was said today," said Johnson.
IWIF, which the legislature created more than 80 years ago, sells workers' compensation coverage to thousands of Maryland businesses, competing directly with private insurance carriers. Glendening appointed the task force this year after publication of several critical articles on the agency and the awarding of a $21 million contract.
In a preliminary report issued last month, the task force recommended that IWIF be subject, for the first time, to financial and other reviews by the state Insurance Administration.
One of those addressing the panel yesterday was O'Donnell, the ethics official, who said that if IWIF is perceived as a state agency and has a board appointed by the governor, then it should be subject to state ethics law.
"There are very few entities out there that were created by the legislature that are not subject to the ethics law," said O'Donnell.
He said that if the legislature were to somehow convert IWIF to the status of a private corporation, then an exemption might be justified.
Task force members debated at length whether to include a provision to limit the authority of the insurance commissioner to order an IWIF rate increase. Sen. Thomas L. Bromwell said such increases could put the agency out of business. The section was eventually dropped from the package after members agreed it wasn't necessary.
Bromwell also argued against proposals to take responsibility for making board appointments away from the governor and the state Senate and have them made by policy holders.
"To be quite frank, I would like to have the Senate involved," said Bromwell.
The panel unanimously agreed.