A special committee of Colorado lawmakers is evaluating Pinnacol Assurance, to examine what role the state should have in managing the quasi-governmental workers’ compensation insurer’s business.
Ken Ross, Pinnacol’s president and CEO, has said he would like to make the workers’ compensation fund private. Earlier this year however, some lawmakers proposed using $500 million of Pinnacol’s assets to help balance the state budget.
While legislation to use the assets failed, a law was passed to more carefully scrutinize Pinnacol’s business practices and the worker’s compensation system in Colorado. Senate Bill 281 includes provisions for performance and financial audits, and creates an interim committee to study worker safety, workers’ compensation laws in Colorado and recommend changes to make to Pinnacol, including possible sale of company. The law also requires the legislative auditor to conduct, at Pinnacol’s expense, at least one “performance audit” in 2009 to look at executive pay, rates, reserves, and injured worker experience, and authorizes the legislative auditor to conduct future such audits at his/her discretion.
Following yesterday’s meeting by the interim committee, Ross said he was “pleased to be able to provide accurate and timely information” as the committee deliberates.
“We enjoyed hearing from all of the witnesses today, and were especially gratified that the Division of Workers’ Compensation was able to verify the impact on reducing premiums that Pinnacol has had over the past four years. In fact, Pinnacol has reduced rates by over 42 percent in that time period, which represents cost savings to Colorado businesses in the amount of $205 million,” Ross said. “Although we understand that recommendations are premature from this first meeting, and that the committee can’t formulate decisions this early, we look forward to having a role in the process.”
In future committee hearings, Ross expects the company will have the opportunity to share more details about Pinnacol’s business successes. In addition to yesterday’s meeting, interim committee is scheduled to meet five additional times this year.
Sources: Colorado Legislature, Pinnacol
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