Gov. Bill Ritter (D-CO) is considering an idea to privatize Colorado’s workers’ compensation insurer of last resort, Pinnacol Assurance, in an attempt to close the state’s projected $1.3 billion budget shortfall for next year.
The governor is quietly revisiting the idea months after a legislative committee chartered to investigate the company’s compensation practice rejected the idea. While the change would need legislative approval, Ritter’s office concedes that any deal must require the company to remain the insurer of last resort. In exchange for full autonomy from regulation, the company would have to pay taxes and a lump sum to the state.
Ritter’s chief legal counsel, Trey Rogers, says “we’ve been talking to Pinnacol for a long time, informally, really since last session.” While the Governor’s office maintains they’re only in preliminary talks with the quasi-governmental insurer, an appraisal of the company has been requested from J.P. Morgan.
Business groups and the Pinnacol Interim Committee rejected the idea last summer. Sen. Morgan Carroll (D-Aurora), who was head of the committee, expressed frustration at what she says is a closed-door deal between the Governor and Pinnacol. “Something stinks about this when you can’t bring your proposal before the public,” says Carroll.
Last year, lawmakers considered tapping $500 million of Pinnacol’s $2 billion in assets to close the state’s budget gap. Resistance from the company and business groups is what led to the creation of the Pinnacol Interim Committee.
Other lawmakers who opposed this idea also oppose privatization, saying that Pinnacol is essentially offering the state “payoff money” to leave it alone. House Minority Leader Mike May (R-Parker) says it would be wrong to tamper with one of the best systems in the country just to fix a short-term problem.
It’s likely this will be an issue is some form in this year’s legislative session in Colorado. Check back with the Denver workers’ compensation attorney blog and stay informed on current happenings and changes at Pinnacol and how they affect you.