Steiner, a 24-year veteran of the insurance industry, will oversee an agency that has had three permanent bosses and two interim leaders since 2007, and was significantly downsized beginning in 2010. State Fund, as it is known, is California's largest workers' compensation provider. State employees manage a $20 billion fund, investing $1.2 billion in annual policyholder premiums.
Steiner, who holds a bachelor’s degree in philosophy from UCLA, worked on product development at Health Net in the mid-1990s. Afterward, he switched to claims for American International Group, Inc. (AIG) for nine years. He eventually became regional vice president of a multi-line claim operation for a 13-state territory.
Steiner left AIG to join CNA Financial Corp., where he held several leadership positions, including vice president for workers' compensation claims.
Steiner joined Zenith Insurance Company, a fire, marine and casualty insurance business in Woodland Hills (Los Angeles County), in 2007 and has been responsible for its national claims operation, with a special focus on California. He was senior vice president for claims when State Fund’s board of directors hired him.
Zenith was assigned a patent in January for the co-invention by Steiner and two others of a system that determines “likely outcomes of active insurance claims by calculating and examining aggregated outcomes of matching historic claims.”
Steiner has been on the California Workers’ Compensation Institute’s Board of Directors since 2010 and is the incoming chairman. He has served on the Workers Compensation Research Institute’s advisory board since 2009.
The San Francisco-based State Fund competes with state-regulated private-sector insurers and also serves as the insurer of last resort for many small and medium-size employers. Those employers have historically had a hard time obtaining affordable, legally required coverage that provides medical care and compensation to victims of on-the-job injuries.
Steiner’s predecessor, Rowe, left last November after presiding over a major restructuring during his three-year tenure. His goal was to slice 1,800 workers from the payroll and reduce operating expenditures by $350 million. Rowe got a lot of that done, but it is not finished.
News stories about the agency for the decade preceding Rowe’s arrival often referred to it as “scandal-plagued.” President James Tutor and vice president of group insurance programs Renee Koren were ousted by the board in 2006 after an internal investigation turned up “unacceptable” operation of an administrative fee program. An external audit linked financial transactions of State Fund involving discounted policies to former board members. The California Department of Insurance said that as much as $1 billion may have been misappropriated.
Republican Governor Arnold Schwarzenegger tried to sell a piece of the agency’s business to private interests for $1 billion in 2009 to help cover a budget shortfall. Insurance Commissioner Steve Poizner, who sued to block the move, said, “A hasty or ill-considered sale could wreak havoc on the already volatile workers’ compensation market.” The effort was dropped six months later.
State Fund gave Steiner a four-year contract with an annual salary of $450,000. He is also eligible for an annual 30% bonus and a monthly $1,500 retention payment. Additional perks include a $270,000 recruitment and retention bonus and state civil service benefits.
Interim CEO and President Carol Newman will return to her post as State Fund general counsel when Steiner assumes the position on June 9.