Rose resigns as head of IWIF

State agency's chief to take advantage of early retirement plan

March 01, 2000|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN STAFF

In a surprise move, Paul M. Rose, the $147,000-a-year head of the state Injured Workers Insurance Fund, announced his resignation yesterday, taking advantage of an early-retirement program that was about to expire.

Rose, 50, who has headed the agency for six years, told IWIF board members of his decision to step down during a closed-door session at its regular monthly meeting in Towson. Rose, who did not respond yesterday to a request for comment, informed IWIF employees of his decision after the board meeting.

Daniel McKew, chairman of the IWIF board, said Rose's announcement came on the last day of an early-retirement program.

Under the retirement package, Rose can collect a one-time lump-sum payment of $454,751 or a lifetime annuity of $24,094 per year, McKew said. He said Rose had not yet indicated which option he would exercise. In addition, Rose will still qualify for a state pension, but at a reduced rate because of his early departure, McKew said.

He noted that Rose recently underwent major surgery. He said that Rose was about to undergo a performance review, an annual routine for the agency's top executives.

"He's come a long way," said McKew of Rose's job performance.

Rose's tenure as the head of IWIF has been embroiled in dispute in recent months. Last year, Gov. Parris N. Glendening, following a series of critical news stories, appointed a task force to review the operations of the agency, which has about $1 billion in assets. A series of recommendations to tighten the regulation of IWIF are now pending in a bill filed last month in the General Assembly.

IWIF, created by the state legislature in 1914, sells worker compensation insurance to Maryland businesses and competes directly with private insurance carriers. IWIF provides worker compensation coverage to about one in five businesses in the state.

Board member Gregory Chasney said that he and his colleagues were surprised by Rose's announcement yesterday. Chasney said he expected Rose to stay in his position for another 60 days to ease the transition. The board has not had time to consider how it will replace Rose, he said.

Rose is the second top official to leave the agency in recent months. Doreen A. Horvath, the chief operations officer, abruptly resigned in early September. Just yesterday, board members were introduced to her replacement, Preston Williams, a former executive of a Minnesota insurance firm.

A former legislative auditor, Rose has had the strong backing of state Sen. Thomas L. Bromwell, the Baltimore County Democrat who chairs the legislative committee that oversees IWIF. Bromwell, who also served on the IWIF task force, frequently came to Rose's defense during that panel's meetings.

"I've always been a supporter of Mr. Rose," said Bromwell yesterday. He said Rose informed him of his decision on Monday. "I think he leaves the company in good shape," he added.

Bromwell said Rose told him that he was "stressed out and ready to move on."

"I told him, `If that's what you have to do, then go for it,' " Bromwell said.

Rose played a central role in awarding a no-bid $21 million contract in 1996 to a company called Statutory Benefits Management Corp. of Baltimore. The firm was hired to provide managed health care services for IWIF and its clients for three years.

On Rose's recommendation, IWIF rejected a series of bids from competing firms and negotiated an exclusive agreement with SBMC. Last year, with the contract about to run out, IWIF bought out SBMC for $6.5 million. It hired about 80 of SBMC's employees, took over its lease and now administers its own managed-care program.

Under the recommendations of the governor's task force, IWIF, like its competitors in the private sector, would be subject to regulation by the state Insurance Administration. IWIF also would be required to join the state insurance guaranty fund, which was created to protect policyholders in the event of the failure of an insurance company.

Bromwell said he has submitted a bill including some of the task force recommendations. He said that under his proposal, the state insurance commissioner would audit IWIF and submit the findings to the agency board and the legislature.

Bromwell said he hoped the IWIF board picks someone familiar with the agency to succeed Rose.

"I think this is a very unique corporation, and you need someone who knows IWIF and understands that it's a different animal," Bromwell said.

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