Any moves to privatize Colorado’s workers’ compensation insurer of last resort will have to wait until next year’s legislative session.
Coming from “various sources” at the Capitol, Pinnacol CEO Ken Ross learned Tuesday that the company’s proposal to pay the state $330 million in exchange for privatization will not be considered by the General Assembly this session.
“We are disappointed that this proposal does not appear to be moving forward because we believe it would have benefited our policyholders, protected injured workers and brought stability to Colorado’s workers’ compensation market,” states Ross. “We will remain open to further discussions with our elected officials to attain these goals.”
Pinnacol made two offers to the state – one for $200 million in February and another for $330 million on March 18th. In exchange, the insurer of last resort would enjoy more autonomy from the state and any other legislative proposals on further regulating the insurer would be dropped.
The issue of privatizing Pinnacol began last year when the state Senate decided to take $587 million of the company’s reserves to plug a gaping hole in the state budget. The House didn’t go along, agreeing to form an interim committee to examine the company’s operations instead. The committee that met in the summer of 2009 came up with 7 bills dealing with several issues at the company. They also drafted a bill to privatize Pinnacol by January 1, 2011 but it failed to get the committee’s full support.
Eliminating these bills was part of the first offer the company wanted in exchange for $200 billion and a loss of some of its tax-free status. Sen. Sal Pace says this amounted to a “bribe” so the company’s revised offer in March dropped this demand.