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STATE COMPENSATION INSURANCE FUND
BOARD OF DIRECTORS

BOARD OF DIRECTORS MEETING

November 17-18, 2016
1:30 p.m

Or Upon Adjournment or Recess of the
Investment Committee Meeting, Whichever is Later

State Compensation Insurance Fund
333 Bush Street, 7th floor
San Francisco, CA 94104

BOARD MEMBERS
Sheryl A. Chalupa, Chair
Robin L. Baker
Daniel M. Curtin
Marvin P. Kropke
Sen. Michael J. Machado (Ret.)
Lawrence E. Mulryan
Jack L. Neureuter
Steven L. Rank
Thomas E. Rankin
Scott K. Reid
William M. Zachry
Christine Baker (Ex-Officio)

AGENDA

OPEN SESSION	Thursday, November 17, 2016 @ 1:30 p.m.
Action/Sheryl Chalupa	1.	Call to Order and Roll Call

Action/Sheryl Chalupa	2.	Antitrust Admonition

Action/Sheryl Chalupa	3.	Consent Calendar¹
	Approval of July 27 and 29, 2016 Open Meeting Minutes Board Member Educational Opportunities and Approval of Planned Board Member Education and Expense Reimbursement Authorization to Secure a Renewal Workers’ Compensation Program effective January 1, 2017 Approval of President’s Employment Agreement Approval of Retirement Resolutions

Information/Andreas Acker	4.	Staffing Update
	Staffing Employee Leave Balance and Usage

Information/Peter Guastamachio	5.	Financial Update – 3rd Quarter 2016

Information/Vernon Steiner	6.	President’s Report

	7.	Reports by the Chairs of Committee Activities
Action/Lawrence Mulryan		a. Governance Committee
		i. Governance, Compliance and Privacy Update
Information/Sheryl Chalupa		b. Audit Committee
		i. Update on Completed Closed Audits
Information/Michael Machado		c. Investment Committee
		i. Bond Transactions and Compliance Report

Information/Sheryl Chalupa	8.	Chairwoman’s Report

Information/Sheryl Chalupa	9.	Board Member Reports

Information/Sheryl Chalupa	10.	Public Comment on Appropriateness of Closed Session for Items 13 through 25

Information/Sheryl Chalupa	11.	Public Comment

CLOSED SESSION
Action/Sheryl Chalupa	12.	Approval of July 27-29, 2016 Closed Meeting Minutes

Information/Frank Kelly, Deutsche Asset Management	13.	Political Impact on State Fund Investment Strategy [Government Code Section 11126(j)(4)]

Information/Sheryl Chalupa and Lawrence Mulryan	14.	Board and Committee Effectiveness [Government Code Section 11126(j)(4)]
	Board Evaluation Action Plan Discussion Review of 2017 Board Committee Assignments and Committee Charters Review of 2017 Board and Committee Agenda Items

Information/Vernon Steiner and Peter Guastamachio	15.	Update on Strategic Plan 2016-2018 [Government Code Section 11126(j)(4)]

Action/Vernon Steiner and Peter Guastamachio	16.	Review and Approval of 2017-2019 Strategic Plans [Government Code Section 11126(j)(4)]

CLOSED SESION		Friday, November 18, 2016

Action/Ken Van Laar and Kate Smith	17.	Pricing Strategy [Government Code Section 11126(j)(4)]

Information/Stephen Hunckler	18.	Update on Claims Strategic Plan [Government Code Section 11126(j)(4)]

Information/Marj Hutchings	19.	Update on IT Strategic Plan [Government Code Section 11126(j)(4)]

Information/Jennifer Vargen and Rhonda Myers	20.	Legislative Strategic Update [Government Code Section 11126(j)(4)]

Information/Vernon Steiner and Andreas Acker	21.	Human Resources Strategic Plan [Government Code Sections 11126(a), (j)(4)]
	2016 Engagement Survey Results 2016 Performance Awards Program Preliminary Review of President’s 2017 Performance Objectives

Information/Ken Van Laar and Randy Hogan	22.	Enterprise Risk Management and Own Risk and Solvency Assessment (ORSA) Update [Government Code Section 11126(j)(4)]

Information/Sheryl Chalupa	23.	Significant Open Audits Report and Fraud Litigation Report [Government Code Sections 11126(e), (j)(2), (3), (4)]

Information/Michael Machado	24.	Financial and Investment Considerations Related to the Strategic Plan [Government Code Section 11126(j)(4)]
	Thermal Coal Investments
Information/Judith Sapper	25.	Pending and Potential Litigation [Government Code Sections 11126(e), (j)(4]
	Baker v. Sierra Pacific Fleet Services et al.; State Fund; Workers’ Compensation Appeals Board; Third District Court of Appeal Case No. C080895; WCAB No. ADJ8111772 Margaris v. California Highway Patrol; State Fund; Workers’ Compensation Appeals Board; Second District Court of Appeal Case No. B269038; WCAB No. ADJ9397913 Zuniga v. Interactive Trucking; State Fund; Workers’ Compensation Appeals Board; First District Court of Appeal Division Two Case No. A143290; WCAB No. ADJ2563341 Ramirez v. The State of California Department of Health Care Services; State Fund; Workers’ Compensation Appeals Board; Third District Court of Appeal Case No. C078440; WCAB No. ADJ6821103 Stevens v. Outspoken Enterprises; State Fund; Workers’ Compensation Appeals Board; Administrative Director of the Division of Workers’ Compensation; First District Court of Appeal Division One Case No. A141435; Supreme Court of California Case No. S230996; United States Supreme Court Case No. A143043 State Compensation Insurance Fund v. Sana Ulla Khan, et al.; U.S. District Court, Central District of California, Southern Division Case No. 8:12-cv-01072 CJC-JCG (mLGx) State Compensation Insurance Fund v. Michael D. Drobot, Sr., et al.; U.S. District Court, Central District of California, Southern Division Case No. SACV13-00956 AG (CWx) Hablian, et al. v. Zurich, et al.; Van Nuys WCAB No. VNO 403 724; ADJ4687742 Electronic Waveform Lab v. EK Health Services, et al.; Los Angeles Superior Court Case No. BC467496; U.S. District Court for the Central District of California Case No. 2:15-cv-08061-DMG-RAO

OPEN SESSION	November 18, 2016 @ 11:00 a.m. or upon adjournment or recess of the Closed Session, whichever is later.

Action/Sheryl Chalupa	26.	Call to Order and Roll Call

Action/Sheryl Chalupa	27.	Approval of 2017 Board and Committee Meeting Schedule and Location

Action/Sheryl Chalupa	28.	Approval of 2017 Board and Committee Agenda Items

Action/Sheryl Chalupa	29.	Approval of 2017 Board Committee Assignments

Action/Sheryl Chalupa	30.	Approval of Committee Charters and State Fund By-Laws

Information/Sheryl Chalupa	31.	Proposals and Suggestions for March 2-3, 2017 Agenda
		Next Board Meeting: March 2-3, 2017 at the State Fund Vacaville Office.

¹Items on the Consent Calendar include routine actions or matters already considered by a committee of the Board and will be enacted by one motion and one vote. There will be no separate discussion of these items unless a Board Member or the public so requests. It is in the Board’s discretion to remove items already considered by a committee of the Board from the Consent Calendar. Any item removed from the Consent Calendar will be considered in its normal sequence on the agenda. If you wish to have an item removed from the Consent Calendar, please submit a speaker card or make your request at the time the Board Chairperson asks if any member of the public wishes to remove an item from consent. After an item, if any, removed from the Consent Calendar has been discussed, the Board will vote to approve all items remaining on the Consent Calendar.

Note: Items designated for information are appropriate for Board/Committee action if the Board/Committee wishes to take action. Any agenda item from a properly noticed Committee meeting held immediately prior to this Board meeting may be considered by the Board. Agenda items may be taken out of order with the approval of the Chairperson. Public comment will be limited to three (3) minutes per speaker and ten (10) minutes per subject item.

STATE COMPENSATION INSURANCE FUNDBOARD OF DIRECTORS

BOARD OF DIRECTORS MEETING

AGENDA

STATE COMPENSATION INSURANCE FUND
BOARD OF DIRECTORS