Pinnacol Assurance is worth as much as $374 million to the state, an analysis by financial services firm Morgan Stanley shows. That’s nearly twice the amount Pinnacol, the state-chartered workers’ compensation insurance fund, offered the state under a proposal that would grant the quasi-governmental agency nearly full autonomy, The Denver Post reports.

A group of lawmakers that heard six days of testimony about the practices of Pinnacol Assurance before this legislative session began oppose privatization of the workers’ compensation insurer. A letter to Gov. Bill Ritter from members of the joint committee obtained Tuesday by The Pueblo Chieftain cites testimony that spotlighted the company’s executive spending habits, reluctance to pay claimants and “lack of accountability and oversight” as reasons to abandon abandon ongoing discussions about privatizing the quasi-governmental insurer, presently under auspices of the state. Democratic Reps. Sal Pace, of Pueblo, Joe Miklosi, of Denver, and Su Ryden, of Aurora, and Sens. Morgan Carroll, of Aurora, Lois Tochtrop, of Thornton signed the letter.

From The Denver Post’s editorial board: “We wish (Senate President Brandon) Shaffer had held his fire until all the details of the proposal are known. While the results of an appraisal now being conducted at Pinnacol’s expense may justify his concerns, it strikes us as reckless to come to such a conclusion without considering the as-yet-unavailable findings.”

The head of the Colorado Senate said Monday he does not want to privatize Pinnacol Assurance, a pronouncement that could dim prospects for the cash-strapped state to reap hundreds of millions of dollars by spinning off the workers’ compensation insurance fund, The Denver Post reports. “The Pinnacol transaction is not something we’re seriously looking at this year,” said Senate President Brandon Shaffer, D-Longmont. “I think it’s a bad deal on a variety of different levels, and I’m not willing to go forward with it.”

The managers of Pinnacol Assurance have offered the state $200 million in exchange for greater autonomy in its workers’ compensation insurance business, The Denver Post reports. The proposal comes as lawmakers are trying to craft a budget for the fiscal year that begins in July, a budget that already faces at least a $1.3 billion shortfall. The proceeds from “separating” the quasi-governmental workers’ compensation insurance fund from the state could be used to help offset cuts to a variety of programs.

Gov. Bill Ritter’s office is moving forward with a deal that would cut Pinnacol Assurance, the state-chartered worker’s compensation fund, free from almost all state control in exchange for a payment that could mean hundreds of millions of dollars to help balance the budget, The Denver Post reports. The state today signed a deal with Pinnacol under which Morgan Stanley will represent the state in any potential transaction that severs the insurance fund from the state. Under the arrangement, Pinnacol will pay all of Morgan Stanley’s fees, and the financial firm would get $2 million or 1 percent of any transaction price, whichever is greater.

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A controversial bill that aims to diversify and open up decision-making at Pinnacol Assurance, the impressively profitable quasi-governmental workers compensation insurance provider, passed out of the House Judicial Committee Friday on a mostly partisan vote, The Colorado Independent reports. The hearing highlighted the tensions that define Pinnacol, an entity designed to serve the public but also required to act as a business.

Denver Democratic state Rep. Joe Miklosi has introduced legislation that seeks to change the make-up of the governing board of tax-exempt Pinnacol Assurance, the state’s largest workers compensation insurer, The Colorado Independent reports. The bill seeks to diversify the perspective of the quasi-governmental business to include injured workers and open the board’s proceedings to greater public scrutiny. Miklosi is getting significant pushback from Pinnacol, which is most strongly opposed to the provision in the bill encouraging public comment on board deliberations.

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By Peter Marcus, DENVER DAILY NEWS
Lawmakers are pushing legislation that would limit the ability of workers’ compensation providers from spying on employees who have made a claim.
The bill stems from discussions by the Pinnacol Interim Committee, after lawmakers looked to tighten control over the state’s workers’ compensation provider of last resort. Concerns were raised about the company spying on injured workers to validate claims.
House Bill 1012, sponsored by Rep. Sal Pace, D-Pueblo, would only allow surveillance with reasonable cause.
The bill would prohibit an insurer or employer from spying on workers who have submitted claims unless the insurer or employer has a “reasonable basis” to suspect the employee has committed fraud. Employees would be allowed to request an expedited hearing before a administrative law judge to challenge the surveillance.
Insurers and employers would also be required to destroy all material collected unless the materials are “reasonably necessary” to resolve an ongoing claim of fraud. Violations would result in a $1,000 per day penalty.
Pace points out that of the $4.7 million spent last year to spy on 2,500 workers, only 11 were found to have actually committed fraud. He said workers are complaining that the surveillance is used to intimidate workers into accepting lesser payments.
“The insurance companies are abusing it, it’s evasive, and it’s our responsibility as legislators to stand up for average Coloradans, and not for the special interest and insurance companies,” said Pace.
Pinnacol, however, sees flaws with the bill. A spokeswoman for the insurer said Pace’s bill would slow down investigations that often require a quick response. She added that the challenges would clog up the court system and constrain investigators, which would lead to more fraud and higher costs to individuals.
“Our surveillance efforts are about finding out the facts in a case,” said Suzi Stolte, spokeswoman for Pinnacol Assurance. “What we want to do is shut down cases as soon as we know that they’re fraudulent. When we find out that information, the sooner we can shut down a case, then that is saving money and time for the policy holder.”

Distributed by Colorado Capitol Reporters

The Pinnacol board supported two proposals aimed at informing injured workers and giving insurance officials feedback on how Pinnacol and other workers’ comp insurers serve claimants, the Denver Business Journal reports.