Bill to Sell CompSource Oklahoma Advances but Objections Mount

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The Oklahoma House Economic Development and Financial Services Committee has advanced a bill that would privatize CompSource Oklahoma, a state agency that serves as the insurance resource of last resort for workers’ compensation insurance.

Created by the Legislature in 1933, CompSource now has some 25,000 policyholders representing about 35 percent of the market, according to Linda Morgan, publications editor with the agency. Morgan said CompSource prefers to consider itself the “assured market” for workers’ compensation insurance. Required to “take all comers,” CompSource is available not only to private companies but state agencies, as well.

House author Rep. Dan Sullivan, R-Tulsa, who authored the bill and chaired a panel last year that studied ways to privatize CompSource, has questioned whether the state should be in the insurance business. It’s been estimated that the entity could bring $350 million to the state coffers if it were sold.

Not everybody is in favor of selling CompSource. State Attorney General Drew Edmondson, who’s also a Democratic candidate for governor, has come out against the plan. Edmondson believes selling the agency could force businesses to pay higher rates and make the insurance unaffordable for new and high-risk employers.

CompSource also believes a sell-to-the-highest-bidder transaction would be detrimental.

“CompSource has proven to be a strong economic development resource for Oklahoma businesses,” said Jason Clark, CompSource president and CEO, in a posting on the agency’s Web site. “Having CompSource as a guaranteed option for Oklahoma businesses is still necessary in today’s insurance market. CompSource insures a large percentage of the state’s high-risk, small and start-up companies — businesses that other insurance companies historically have chosen not to write because it simply was not profitable. A sale would adversely impact not only CompSource’s policyholders’ rates, but other businesses as well because it would eliminate a competitive market.”