Pinnacol Assurance, Colorado’s leading provider of workers’ compensation insurance, announced today the company is about to reach its long-term surplus goal — several years ahead of schedule. Pinnacol anticipates its year-end financial report will show a surplus of over $215 million. After the fund balance is verified by the Colorado Division of Insurance, the company can begin making plans to pay policyholder dividends for the first time in more than 20 years.
“I am very pleased to be filing a dividend plan, as one of my personal goals is to pay dividends again to our policyholders,” said Gary Pon, president and CEO of Pinnacol Assurance.
In addition, Pinnacol Assurance’s board of directors will begin the important task of transitioning management of the company’s portfolio from the state treasurer’s office to the board.
“This is the culmination of 15 years of hard work by Pinnacol Assurance’s employees, who turned a state agency with a $500 million deficit into a financially solid workers’ compensation insurance company,” said Diedra Garcia, chairman of Pinnacol Assurance’s board of directors. “In the process, the state’s insurer of last resort has been transformed into a customer-responsive insurer of choice, creating positive, competitive pressure in the Colorado insurance market.”
As a result of this achievement, Pinnacol’s board has discontinued the company’s long-term incentive plan for 2003 and subsequent years. The plan recognized the executive team’s critical role in achieving the company’s surplus goal. With the surplus target having been met, the board will shift the focus of executives and their teams to further enhancing service and helping policyholders earn dividends. The Division of Insurance’s requirement was for Pinnacol Assurance to reach its surplus goal by 2010.
“Our ability to grow premiums, prevent workplace injuries, manage claims, and control expenses has enabled us to reach our surplus goal ahead of schedule,” said Pon. “I know we will continue to provide the excellent service our customers have come to expect, and we look forward to rewarding their favorable experience with dividend payments.”
Pinnacol Assurance’s policyholders have consistently rated the company at an endorsable level of 8.1 on a 10-point scale, indicating that they believe they are receiving good quality service.
Operating by law as a domestic mutual insurance company, Pinnacol Assurance is not a state agency, does not have state employees, and receives no taxpayer dollars. The company’s nine-member governing board of directors is appointed by the governor and confirmed by the state senate. Regulated by the Division of Insurance, the company’s financials are audited annually by a firm selected by the state auditor’s office and presented to the legislative audit committee for approval.
Pinnacol Assurance is Colorado’s largest and oldest provider of workers’ compensation insurance with approximately 53 percent of the market. The company provides competitively priced, assured coverage, immediate attention to claims, a highly qualified network of SelectNet medical providers, and proactive safety programs to more than 57,000 Colorado businesses. Pinnacol Assurance’s policyholders represent many of Colorado’s industries, including construction, manufacturing, high-tech, transportation, and agriculture.
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