A couple of weeks ago, we told about an upcoming hearing involving Pinnacol Assurance, the quasi-governmental Colorado workers’ compensation insurer of last resort. At issue were some practices the company was using to establish rates for its policyholders.
As promised, we’re here to recap the hearing – which in fact was cancelled at the last minute.
In fact, both the Division of Insurance and Pinnacol Assurance reached a settlement on the disputes. Voting Tuesday, Pinnacol’s Board of Directors agreed to pay some of their policyholders a total of $15 million along with a $80,000 civil penalty to the Division for irregularities in the way the Pinnacol was determining rates for workers’ compensation claims.
Also under the agreement, Pinnacol will quit using two rate filing factors the division claims violated state law.
Specifically, it was discovered in an audit started this past spring that Pinnacol was using rate filing factors that were not on file with the Division.
In addition to fines and refunds to certain policyholders, Pinnacol will be hiring a corporate compliance officer who will be responsible for ensuring all aspects of regulatory compliance are covered.
“We have come to an agreement that the Division of insurance Believes will provide relief to Pinnacol policyholders,” comments Insurance commissioner Marcy Morrison.
Morrison goes on to say, “Because Pinnacol is the [workers’ compensation] insurer of last resort in Colorado, employers who are policyholders often accept the rates without question or complaint. It’s important that the Division of Insurance maintain its vigilance to be sure the rates are not excessive, inadequate or unfairly discriminatory.”