Colorado worker’s comp fund sale off the table
Associated Press Writer
DENVER – Gov. Bill Ritter has canceled a proposal to sell the state-chartered workers’ compensation insurance fund that wanted to be privatized, after lawmakers said it has no chance of passing the Colorado Legislature.
Ritter notified the company Tuesday that discussions for legislation this year are off, said Pinnacol Assurance spokeswoman Suzi Stolte.
President Ken Ross had offered $330 million to the state so it can go private, $130 million more than it offered earlier for a buyout of the company, which has assets of $2 billion.
Ross said the door is still open for next year.
“We are disappointed that this proposal does not appear to be moving forward because we believe it would have benefited our policyholders, protected injured workers and brought stability to Colorado’s workers’ compensation market. While this is not the outcome Pinnacol was seeking, we remain committed to providing reasonable rates, issuing dividends, serving injured workers, offering superior customer service, and covering Colorado’s residual market,” Ross said.
State Sen. Morgan Carroll, a D-Aurora, who chaired a committee that examined a possible sale of Pinnacol, has said it was “a bad idea for employers and employees.”
“We’ve already considered this and everyone on the committee agreed it should remain quasi-governmental,” she said in January.
Pinnacol has had a rocky relationship with lawmakers after company officials were challenged last year over reports of lavish spending and excess profits. Lawmakers were also upset after the company rejected suggestions that part of the profits could be used to balance the state budget.
Ross defended huge salaries and bonuses for himself and his employees, including thousands of dollars spent on entertainment, such as $1,500 for one night at the Mirage in Las Vegas. Ross said he was entertaining other insurance executives and it helped him recruit top talent.
Lawmakers came back with a package of reform bills that will be heard Wednesday by the Senate Judiciary Committee.
Ross said one measure, House Bill 1009, would change the makeup of the board of directors, disrupting the management of Pinnacol at a time when it has been highly successful at lowering rates, issuing dividends and ensuring the delivery of excellent customer service.
He opposes House Bill 1356 that would cap the company’s surplus, which he said would threaten the company’s ability to remain solvent and provide protection to policyholders and injured workers.
And Ross is also against a third, House Bill 1012, that would limit surveillance, which Ross said will impede the ability of all insurance companies to conduct legitimate investigations and scrutinize fraudulent claims.
Carroll said the company needs tighter regulation to ensure workers get the treatment they need and that companies paid for.