Colorado: State's largest comp insurer says no changes needed to its structure
Pinnacol Assurance -- the state-chartered, but independently run and funded insurance firm -- has been the subject of a series of ongoing hearings required under legislation signed into law in June. Legislators are looking into charges that the insurer amassed large reserves, overcompensated its executives, and spent lavishly on entertainment while denying injured employees' claims.
Members of the interim legislative committee have discussed various proposals, ranging from privatization to enacting stricter controls to bolster protections for injured workers and deter claim denials. However, representatives from the insurer said they do not believe any retooling of Colorado laws or restructuring of the company is necessary.
"We believe strongly that Pinnacol is not broken, so we're saying don't fix it," said Ken Ross, president and CEO of the company. "We continue to assert that it is our responsibility to safeguard Colorado companies, their employees, and Pinnacol's assets, which belong to our policyholders. There's no need for any tinkering with the laws regarding Pinnacol's assets, or its legal stature."
Ross was referring to legislation floated earlier this year that would have taken $500 million from Pinnacol's reserves to balance the state's projected budget shortfall for the coming year. However, lawmakers withdrew the bill after Gov. Bill Ritter Jr. indicated that he wouldn't support it and Attorney General John Suthers concluded that the plan would have violated Colorado's Constitution.
Ross said he has met with business community leaders and heard strong support for leaving Pinnacol in its current status, as "insurer of last resort." The business community, he said, continues to be alarmed by the idea that Pinnacol's assets are at risk.
"It's been clear that our business model puts a top priority on stable rates, injured worker care, workplace safety and operational efficiencies," Ross said. "Pinnacol's success and business model were validated multiple times in testimony heard by the interim committee during the first four meetings."
The committee is not required under law to suggest legislative changes. However, Sen. Morgan Carroll, D-Aurora, chairperson of the group, has indicated she wants tighter restrictions imposed on Pinnacol.
The committee's last meeting is scheduled for mid-October.
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October 12, 2009
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