Colorado: Pinnacol Assurance representatives defend comp insurer's practices
Representatives from Pinnacol Assurance -- the state-chartered, but independently run and funded insurance firm -- recently testified at a series of hearings required under Senate Bill 281, which was signed into law in June. The bill included provisions for performance and financial audits and creation of an interim committee to study the company.
Ken Ross, president and CEO of Pinnacol, told the committee that the insurer accepts more than 90 percent of the 55,000 workers' comp claims it receives and that its denial rates are lower than the industry average. Ross also outlined how the firm lowered workers' comp rates, paid dividends, maintained high customer satisfaction scores, and honored its commitment to "ensure that injured workers are treated with care and compassion and receive timely and appropriate medical care." With regard to its spending practices, executives from Pinnacol told lawmakers that its compensation structure is in line with similar-sized insurers.
Association addresses privatization.
The committee also debated the possibility of privatizing the insurer. Bruce Wood, associate general counsel and director of workers' compensation for the American Insurance Association, laid out the policy considerations that lawmakers should address in deciding whether the firm should be privatized, allowed to operate as a quasi-state agency, or become a fully-made state agency.
"Privatization should come with a level playing field to include payment of state premium tax and participation in the state guaranty fund," he said. "It is extremely important to ensure that any such change is done carefully and correctly moving forward."
Ross has indicated that he would be open to privatization but said the company "expects to play a strong role in crafting any legislation that would impact Pinnacol's future."
The interim committee will continue to meet through the fall to determine whether to make a legislative recommendation to the 2010 General Assembly.
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September 28, 2009
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