The State Compensation Insurance Fund, the scandal-plagued state-run insurance company under investigation for allegations of potential misconduct by former top executives, picked an industry veteran Wednesday as its new president.
Commonly known as the State Fund, the insurer is based in San Francisco and provides workers' compensation coverage to about 220,000 California employers.
The State Fund's board announced it had selected as its new president Janet Frank, currently executive vice president of North American field operations for CNA Financial, the nation's fifth-largest insurance company.
Frank "has been recognized for her strategic planning and process improvement capabilities," said Jeanne Cain, the fund's board chairwoman.
"She will be a tremendous asset. . . as we continue work to create an organization steeped in integrity and transparency," she said.
State prosecutors and the Highway Patrol launched a sweeping investigation after an external audit of the fund led to the forced retirement last year of State Fund's then-president, James Tudor, and Vice President Renee Koren.
The audit uncovered financial transactions involving the sale of discounted policies through outside associations that had links to former board members, according to testimony provided to the state Senate Banking, Finance and Insurance Committee in March.
The total in misappropriated funds could run as high as $1 billion, the Department of Insurance has said.
The State Fund is the biggest workers' compensation insurance company in California, with 32% of the market and $3.6 billion in premiums collected in 2006.
Frank replaces interim president Lawrence Mulryan.