The Better Business Bureau serving Northern Colorado supports Pinnacol Assurance and its position on retaining full and complete control of its asset base and operating funds, in order to able to provide a superior standard of workers compensation insurance coverage to Colorado companies and their employees.
The proposed legislation raiding Pinnacol Assurance assets is bad for Colorado taxpayers, bad for Colorado businesses and bad for Colorado’s injured workers and their families. It is a violation of the intent of the 1991 legislation which created Pinnacol to assure that workers’ needs will be met.
We are extremely concerned that one bill (SB 273) not only would force Pinnacol to surrender $500 million to the State Treasurer, but would also cancel its status as a domestic mutual insurance company owned by its policyholders. Yet another bill (SB 281) would explore the sale of Pinnacol to a third party, completely removing Pinnacol from its status as a Colorado-owned business.
There needs to be a realization that the raiding of Pinnacol’s assets will ultimately come out of the pockets of Colorado’s small and medium-sized businesses. A vital segment of business, small and minority-owned, will be disproportionately hurt. This is in essence a hidden tax in the form of increased rates and reduced dividends.
Pinnacol insures over 58,000 businesses across the state. In four years, it has reduced its rates by 10% to 12% each year, resulting in a savings of $212.5M to business owners.
Since 2005 Pinnacol has returned general dividends totaling more than $227M to Colorado businesses and is getting ready to issue a fifth dividend.
During these tough economic times, businesses are struggling and cannot afford higher workers’ compensation costs. The raiding of Pinnacol assets imperils the promises it has made to Colorado’s injured workers, who will have no one else to turn to in the company’s absence. These assets are needed in times of natural or man-made disasters, for catastrophic events involving mass injuries, to pay claims for injured workers and their dependents for decades to come and to account for medical inflation. No one is standing behind Pinnacol to pay benefits.
Pinnacol Assurance is the backbone of Colorado’s workers’ compensation system, a system that is essential to a healthy economy. Raiding its assets does irreparable harm to a workers’ compensation insurance system that has been a model of fairness, stability and supportive of economic health since the sweeping reforms of 1991.
Raiding Pinnacol’s assets reduces its ability to invest in workplace safety and keep employees safe.
THEREFORE, we, as members of this organization, the Better Business Bureau serving Northern Colorado and Greater Wyoming, do hereby resolve that we offer our heartfelt and complete support to Pinnacol Assurance, and urge members of the General Assembly to find new and creative approaches, which do not adversely impact Colorado businesses, as a method to balance the state’s budgets.