Special session hearings reveal SIF financial woes
By The Star Staff
The special legislative session convened by Gov. Pedro Pierluisi Urrutia so lawmakers could pass Senate Bill 931, which sought to transfer $165 million from the State Insurance Fund Corp. (SIF) in order to offset rising energy costs for utilities, ended up instead revealing that the public corporation is in a virtual financial crisis.
Lawmakers did not approve Senate Bill 931, which sought to mitigate energy and water hikes increases during the extraordinary session, but instead approved several resolutions calling for probes, such as one to investigate the state of the Municipal Revenue Collections Center, and three nominations.
The legislation that would have transferred money from the SIF to mitigate utility hikes got a negative report from the Senate Energy Affairs and Government committees last week and was not brought to the floor for a vote.
The report revealed that the SIF, which provides workmen’s compensation for accidents, has a deficit of $1 billion while its investment portfolio has lost $64 million.
Pierluisi wanted to amend the legislation to withdraw $225 million from the public corporation.
According to the final report from the committees, SIF data shows that the public corporation has a net deficit of $1.4 billion as indicated in the 2020 audited financial statement, the most recent audited statement available, and a deficit of $1 billion as of June 30, 2022, according to the unaudited statement.
“One of the most worrying situations is the following: As of June 30, 2022, [SIF] investments, due to the market downturn, have already experienced an unrealized loss of $63.6 million,” said a letter submitted by the new investment strategy consultant for the public corporation, Mission Prime LLC.
The consultant also said that fluctuations in the market can lead to a 15% loss in the portfolio if assets are sold.
“The information received by the [SIF] raises a different financial situation than the one that has been presented through explanatory briefs and papers received at the Public Hearings,” the report said.
During the hearings, SIF administrator Jesús Rodríguez gave assurances that the financial state of the SIF could handle the money transfer. The report noted that when Rodríguez defended the bill in House hearings, he asked for a source of repayment.
Several SIF unions objected to the funds transfer, contending that money from SIF should go to help injured workers and improve corporation services, stressing the need to recruit doctors and other health care professionals.