August 24, 2010
Senate Democrats began an inquiry into possible rate irregularities at Pinnacol back in 2009. Initial efforts to hold interim committees or hold a peformance audit were vigorously opposed by Pinnacol and some of their political allies.
The state audit report found several problems, but specifically identified irregularities in Pinnacol's rate and premium practices. Pinnacol had relied on several rate factors that were never filed with the Division of Insurance, in violation of state law. They also were "double" or "triple" dipping on some rate factors leading to some businesses being over-charged.
The Division of Insurance promptly responded with another indepedent investigation indicating that Pinnacol had filed to file all of their rate factors and could not justify their rates. Specifically, the Division found Pinnacol's rates to be excessive and discriminatory -- which also violate Colorado law.
DORA was scheduled to present its evidence to an independent hearing officer tomorrow, when Pinnacol agreed to a settlement to avoid the hearing. DORA's press release about the terms of the settlement is replicated below:
Division of Insurance Assesses Pinnacol $80,000 Civil Penalty;
Pinnacol to Credit $15 Million to Certain Policyholders in 2011
The Division of Insurance announced it has reached a settlement agreement with Pinnacol Assurance, the state’s largest workers compensation insurer.
Pinnacol has agreed to credit policyholders a minimum of $15 million against premiums in 2011. Only policyholders who are schedule-rated will receive credit. A schedule rating is a tool that workers compensation carriers can use to adjust premiums, either up or down.
In addition, Pinnacol Assurance will pay a civil penalty of $80,000 (representing $10,000 per year for violations where the company used unfiled schedule rating factors to set premiums for some policyholders.)
“We have come to an agreement that the Division of Insurance believes will provide relief to Pinnacol policyholders,” said Colorado’s Commissioner of Insurance, Marcy Morrison. “Because Pinnacol is the workers compensation insurer of last resort in Colorado, employers who are Pinnacol policyholders often accept the rates without question or complaint. It’s important that the Division of Insurance maintain its vigilance to be sure that rates are not excessive, inadequate or unfairly discriminatory.”
Pinnacol will cease to use two rate filing factors which the Division of Insurance asserted were violations of Colorado law. The use of these two unfiled rating factors resulted in an agreement for Pinnacol to credit the $15 million to certain policyholders.
Pinnacol Assurance was the focus of a state-ordered audit in the spring of 2010. Details uncovered in the audit identified the use of rating factors which were not filed with the Division of Insurance as required by law. Findings in the audit raised concerns that Pinnacol’s practices could result in excessive, inadequate, or unfairly discriminatory rates.
“Thanks to the leadership of the Commissioner of Insurance, premiums for workers compensation have decreased over 35 percent in the past three years in Colorado. This agreement continues that trend and helps employers in Colorado by keeping their costs low so they can invest their capital in growing their businesses,” said Barbara Kelley, Executive Director of the Department of Regulatory Agencies.
The settlement agreement and original notice of hearing (now cancelled) can be viewed on the Division of Insurance website at
http://www.dora.state.co.us/insurance/enforcement/2010.htm
The “Notice of Hearing” is at
http://www.dora.state.co.us/insurance/meet/hearings/NoticeHearingPinnacol081010.pdf
The settlement agreement addresses four main violations outlined in the “Notice of Public Hearing.”
http://www.dora.state.co.us/insurance/enforcement/2010/cinvPinnacolStipFao082410.pdf
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August 20, 2010
From the Colorado Department of Labor Employment:
COLORADO ECONOMIC & EMPLOYMENT UPDATE
Aug. 20, 2010
New figures released today by the Colorado Department of Labor and Employment offer a mixed bag of information about our economy and job market.
Three areas of note from the July data:
→ Unemployment Rate Holding Steady
For the fourth straight month, Colorado’s unemployment rate held steady at 8.0 percent. That compares favorably with the national rate of 9.5 percent and is one sign of a stabilizing state economy. The July 2009 rate was 8.1 percent.
30 states and the District of Columbia have higher rates than Colorado. Our employment situation continues to be stronger than in most other states.
↑ Two Months of Private-Sector Job Gains
Colorado businesses added 2,700 new jobs in July – largely in the tourism industry – and 5,700 in June. That’s encouraging growth in the private sector and good news for all of Colorado.
↓ Discouraged Job-Seekers
At the same time, the number of working Coloradans decreased by several thousand and the number of Coloradans actively seeking but unsuccessfully finding jobs increased by a few hundred. We still have a lot more to do to get people back to work.
Clearly, the economy remains fragile. Yet, despite the struggles, we continue to see numerous bright spots in the economy:
In the past month, several companies have announced job expansions:
Extra Aircraft is creating 220 new manufacturing jobs in Montrose.
Juwi Wind is adding 20 jobs in Boulder.
American Zephyr is adding 30 wind-industry jobs in Westminster.
U.S. Commerce Secretary Gary Locke recently said in the Denver Post the nation should follow Colorado in establishing a New Energy Economy.
For the second year in a row, CNBC has named Colorado the No. 3 state in which to do business, and Forbes.com says we are No. 4.
According to a new study by the American Legislative Exchange Council, Colorado’s economic outlook now ranks 2nd best of all 50 states.
Gov. Ritter continues to pursue a variety of strategies that will help stabilize our economy, support our businesses and drive sustained job growth.
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