Colorado Workers’ Comp Insurer Wants to Go Private

The head of Colorado’s state-chartered workers’ compensation insurance fund says the company wants to go private.

Ken Ross, president and chief executive of Pinnacol Assurance, told The Denver Post editorial board the company might be willing to pay taxes and a lump sum of cash to the state in exchange for greater autonomy.

Next week, a special committee of the Legislature begins what could be tense hearings on Pinnacol’s business practices, assets and future.

“We’ve looked at possibly beginning to pay state premium tax. We can start paying that to the state, if we are a true mutual (insurance) company,” Ross said.

Ross estimated the taxes at $5.7 million a year and said Pinnacol also would consider paying the state up to 20 years in back taxes. He declined to put a figure on that amount. Pinnacol, which is currently a political subdivision of the state, does not pay taxes.

Ross said Pinnacol wants to retain its status as the guaranteed workers’ compensation insurer of last resort. Ross said that under the proposed arrangement, the governor, who now appoints all of Pinnacol’s board members, would only appoint some board members.

The quasi-governmental agency was first created as a state agency under direct state control in 1915, charged with being the insurer of last resort for companies that couldn’t get workers’ compensation insurance on the private market.

Lawmakers changed the law to say that while Pinnacol was still a political subdivision of the state, it would be operated as a mutual insurance company, creating tension between lawmakers and the company.

Pinnacol came under scrutiny during this year’s legislative session after some lawmakers proposed transferring $500 million from its $2 billion in assets to help balance the state’s budget.

That bill, along with another that would have put Pinnacol back under state control, failed after business groups opposed it.

Lawmakers instead created an interim committee to examine Pinnacol. It will hold its first meeting Tuesday.

Sen. Morgan Carroll, D-Aurora, who heads the committee, has solicited complaints from injured workers whose claims were handled by Pinnacol and invited them to testify.

Senate President Brandon Shaffer, D-Longmont, who sponsored the failed measure to put Pinnacol clearly back under state control, said any action regarding Pinnacol will be based on recommendations from the interim committee of how best to protect injured workers and assure reasonable workers’ comp premiums for employers.

Calls made by Insurance Journal to Pinnacol were not immediately returned.

Topics Carriers Legislation Workers' Compensation Colorado