DENVER – Gov. John Hickenlooper Thursday recommended that the restructuring proposal by Pinnacol Assurance move forward by seeking policyholder approval and beginning legislative discussions.
The recommendation was made in a draft report to the Stakeholders’ Task Force assembled by the governor to gather information about the potential impacts of privatizing Pinnacol, the quasi-governmental workers’ compensation insurer of last resort.
The task force has one more meeting, scheduled for Jan. 31, and has held three to date.
“On balance, and after extensive review by the technical team and input from the task force, the governor believes that the benefits of the proposed restructuring more than outweigh the risks for both policyholders and the public,” the draft report said.
The recommendation also includes changes to the proposal suggested by the governor. These include:
> Preferred security is increased from $340 million to $350 million.
> Pinnacol provides an additional $22 million for an Injured Workers Fund.
> Pinnacol pays a $13.6 million dividend to the Futures Fund annually in advance rather than quarterly in arrears.
> Pinnacol’s executive equity compensation is limited to terms approved by the governor and the Division of Insurance.
> Pinnacol remains a non-exclusive provider of workers’ compensation insurance of last resort and pays premium tax on such “last resort” business. (Last resort means that Pinnacol insures even those workers in high risk jobs who other insurers may have turned down.)
The proposal is contingent upon several factors, including adoption of enabling legislation by the Colorado General Assembly, approval by Pinnacol’s Board of Directors and approval by Pinnacol’s policyholders.
To read more about the potential privatization of Pinnacol could the changes could affect business, see http://www.ncbr.com/article/20120113/EDITION07/120119941.
