Colorado Split on Requesting Information from Largest Workers’ Comp Insurer

Colorado legislative leaders were split down the middle this week on whether to seek confidential financial information from the state’s largest workers’ compensation insurer to see if the operation could be sold to another company.

According to a report in The Pueblo Chieftain, The Legislative Council voted 7-7, thus failing to approve House Speaker Doug Dean’s request to seek actuarial statements about financial reserves held by Pinnacol Assurance, formerly known as the Colorado Compensation Insurance Authority.

Dean, a Colorado Springs Republican, said legislators need the information to decide whether it would be viable for the state to sell Pinnacol, the workers’ comp insurer of last resort created by the Legislature in 1915.

Last spring, Dean and Senate President Stan Matsunaka, D-Loveland, sponsored a bill that would have led to selling the assets, with the state sharing in the proceeds. The bill failed in House committee.

When he first made his request, Dean said, Pinnacol’s chief executive officer, Gary Pon, had agreed to offer information if legislators would keep it to themselves. Dean said he promised they would, but Pinnacol then came back and raised other questions. Pinnacol questioned, for instance, whether the state would ever see any of the proceeds.

Salomon Smith Barney, investment bankers, asked for the actuarial information — evidently to broker the potential sale — if the Legislature were to authorize it over Pinnacol’s objections.

Cathy Walsh, a lobbyist for Pinnacol who objected to making it public, noted that they could very well run that information to their competitors. Scott Meiklejohn, a lobbyist, testified for Salomon Smith Barney, saying the investment firm needed the financial records.

The bottom line is that Pinnacol executives oppose the sale at this time, Walsh said.

She suggested legislative leaders instead ask the state insurance commissioner, state auditor or state treasurer to serve as a go-between on Dean’s request. While Dean requested detailed information, Walsh volunteered a general look of Pinnacol’s financial picture.

State Insurance Commissioner William Kirven requires Pinnacol to book surplus reserves of $250 million, she said, and the authority has grown them to about $100 million. Walsh said it could take another two or three years to reach the stipulated reserves.

In the end, half of the House and Senate leaders on the Legislative Council voted with Dean while the other half turned down the speaker’s proposal.

Topics Carriers Workers' Compensation Colorado