July 30, 2009 05:36 PM UTC

Pinnacol feeling the heat?

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• by: allyncooper

( – promoted by Colorado Pols)

From this mornings Denver Post:

The head of Pinnacol Assurance says the state-chartered workers’ compensation insurance fund might be willing to pay state taxes and a lump sum of cash in exchange for greater autonomy.

Ken Ross, president and chief executive of Pinnacol, made his remarks Wednesday in a meeting with The Denver Post’s editorial board, less than a week before a special committee begins what could be tension-filled hearings to examine Pinnacol’s business practices, assets and future.

The only legislation to survive the attempt last session to appropriate $ 500 million of excess funds from Pinnacol was the establishment of a committee, chaired by Sen. Morgan Carroll D-Aurora, charged with examining the operations and function of this quasi-governmental agency. Among the many issues to be examined is why Pinnacol has such large surpluses when it is legislatively mandated to refund surpluses over and above prudent reserves back to the policy holders, executive compensation (some Pinnacol executives make six times as much as the governor), and if the agency is effectively serving the interests of injured workers (there are numerous horror stories of injured workers being denied claims or otherwise inadequate treatment).

One week prior to the start of the hearings, it appears Mr. Ross, CEO of Pinnacol, has gone into a damage control mode to presumably deflect the scrutiny of the committee and craft a “deal”. Quite frankly this disingenuous tactic smacks of a “plea bargain” of sorts. Pinnacol has not been charged with a crime, or even accused of any nefarious wrongdoing, and Senator Carroll’s legislatively mandated committee is not a grand jury. However that committee has requested documents from Pinnacol that have not been produced, and as a last resort the committee does have subpoena power to compel Pinnacol to produce the requested documents.

Obviously some of this posturing and defensiveness on the part of Pinnacol is a result of the legislatures unsuccessful attempt to appropriate excess funds from Pinnacol last session. I for one opposed that legislation, because I believed it retroactively voided contracts between Pinnacol and its policy holders. But in the course of that process, legitimate issues were raised into the operation of this quasi-public agency – issues which rightly deserve examination in deference to good public policy, i. e. is Pinnacol effectively performing it’s legislatively mandated mission of serving the interests of the business community and the interests of injured workers.

Senator Carroll’s committee must proceed with its work as unambiguously mandated by the legislature. Let’s objectively examine the policies and procedures of Pinnacol (I know Senator Carroll will do that), and the recommendations of that committee for change, if any, will be forwarded to the legislature for it’s consideration next session. Attempting to “plea bargain” change to Pinnacol before the hearings should be taken for what it is.