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At its meeting on Friday the State Fund Board of Directors announced that Tom Rowe, CEO and President and Dan Sevilla, CFO will resign from State Fund. The reason was not stated in the website announcement.

It was not immediately know why the men stepped down, and the announcement came as a surprise to some. “Certainly many people were surprised in the room when the board chair made that announcement,” said Jennifer Vargen, senior vice president of marketing and communications for State Fund, who was quoted in the Insurance Journal and was quick to point out the board was ‘very complimentary’ of both men as they made the announcement. Vargen couldn’t say why the decision was made, and she said the board hasn’t made that known. “No reason was given,” she said. Pressed about motives for the command change, Vargen replied: “These are voluntary resignations.” A call by the Insurance Journal seeking comment has been put into Lawrence Mulryan, the board chair. Rowe and Sevilla couldn’t immediately be reached for comment. Board members contacted for comment by the Insurance Journal were not saying much either. “I can’t really talk about it,” said Bill Zacrhy, vice president of risk management for the Safeway supermarket chain. Zacrhy indicated that personnel matters are not something he could speak about.

Several years ago, State Fund’s Board set the organization on a path to transform its operations by improving its transparency, accountability, efficiency, and productivity to ensure a stable and open workers’ compensation insurance market. “The executive team has done an outstanding job laying the foundation for State Fund’s future,” said Board Chair Larry Mulryan. “The Board thanks Tom for his vision and leadership and Dan for his outstanding fiscal stewardship. We will continue the transformational work that is well underway.”

Rowe and Sevilla will step away from overseeing day-to-day operations immediately but will remain available for advice and consultation until the end of the year. The Board will immediately begin a search for a new CEO and has named Carol Newman, State Fund’s General Counsel, as interim President effective immediately. Newman has been with State Fund since 2008 and has played an integral role in leading State Fund’s transformation. Carol has had a long career in insurance that spans over 30 years, affording her the opportunity to oversee a wide breadth of insurance operations including claims, broker/agency management, human resources and government and industry affairs.

The Board also announced that it has appointed Pete Guastamachio as interim CFO. Guastamachio joined State Fund in 2009 and is State Fund’s Chief Investment Officer. He has more than 30 years experience in the financial world having served as vice president-assistant portfolio manager for Bank of the West. He also served in a variety of positions with Argonaut Insurance.

“The executive team will remain focused on building a competitive company with a resourceful, creative workforce that provides fair prices and excellent service, and creates stability in the market,” said Newman. “Our financial position is outstanding. It’s going to take time to fully realize our vision, but it is clear we have made good progress. Most importantly, we, along with the employees of State Fund, are committed to getting it done.”