State insurance officials are gearing up for the first full-scale financial examination of the state Injured Workers Insurance Fund, a public agency that competes with private workers' compensation insurance carriers.
Deputy Insurance Commissioner Dennis W. Carroll said yesterday that preliminary work for the IWIF examination has begun, even though a law requiring a state review does not take effect until Oct. 1. The bill, which also reorganizes IWIF's board, was signed Thursday by Gov. Parris N. Glendening.
The preparations come as IWIF prepares to select a new chief executive. Among the finalists is Del. Michael E. Busch, an Anne Arundel Democrat who was a co-sponsor of the IWIF legislation. Among items included in Busch's bill was a provision barring the public from IWIF board meetings.
Busch is reported to be the favored candidate among four finalists for the job, which was vacated earlier this year by Paul M. Rose, a former legislative auditor. The job pays about $147,000 per year. Other candidates include an insurance industry lobbyist and two insurance executives.
Busch, 53, an administrator for youth athletics in Anne Arundel County, has been a legislator since 1987. He served on a task force named by Glendening last year to review IWIF. Busch subsequently filed a bill to implement many of the task force's recommendations. His bill, however, added provisions exempting IWIF from both the public records and public meetings laws. The exemption from the public records law was dropped from the final version of the bill.
Daniel McKew, chairman of the IWIF board, said that the four finalists, recommended by a New York consulting firm, would be narrowed to two, who would meet with the entire board. He said a final decision will be made shortly.
The new IWIF law also expands the seven-member IWIF board to nine, and includes provisions limiting future board members to two terms. At present there are no term limits. It will also place IWIF in a state guaranty fund, which protects policyholders in the event of insolvency.
Carroll, the state insurance official, said a preliminary meeting has been held with IWIF representatives and that future meetings will focus on the kinds of records and data his examiners will need for a full financial review. He said the examiners will apply the same standards used for private insurance carriers.
Under the new law, the insurance administration will not have the authority to order an increase in the rates IWIF charges to its customers. That authority rests with IWIF's board.