Pinnacol Hearings Resume with Fourteen Proposals

By | October 15, 2009

On Friday, Colorado legislators hold their last hearing on the disposition of the state workers’ compensation fund, Pinnacol Assurance. They will be considering 14 different reform bills.

The 10 legislative committee members will be voting on the bills to decide which ones should be forwarded on to the full Colorado Legislature for consideration during its next session, which begins in January.

A spokesperson for Pinnacol said on Tuesday that the officials at the state fund had not had time to review the recently drafted bills and therefore could not say which ones it might be amenable to and which it might oppose. However, previously Pinnacol CEO Kenneth Ross has said no changes are needed.

The Pinnacol hearings have been going on since August. They were prompted by a law passed after criticisms arose that Pinnacol executives were spending lavishly on corporate entertainment in places like Las Vegas and paying those executives exorbitant salaries.

When those criticisms came to light, it was noted that Pinnacol had $500 million in capital reserves, and it was proposed that the state, which was in a budget crisis, raid those reserves.

A subsequent research report from Conning Asset Management suggested that Pinnacol’s balance sheets were not out of line with industry norms, and the percentage spent on entertainment was less than the average for the insurance industry as a whole.

The proposed bills range from one that would require the Pinnacol chief executive to submit an annual report to the governor and the general assembly, to one that would create an injured worker advocate office, to one that would privatize the company.

Another bill would require that the state Senate approve the appointment of the Pinnacol chief executive officer.

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