Report: Pinnacol Seeking Approval to Expand to Other States

Tuesday, December 15, 2015 | 0

Pinnacol Assurance next year will ask Colorado lawmakers for permission to sell workers' compensation coverage in other states, according to a report by the Denver Business Journal.

Pinnacol plans to bring the Legislature a proposal that would allow it to provide coverage to out-of-state workers for companies based in Colorado. The proposal would also allow the state-chartered carrier to create a for-profit subsidiary offering coverage in other states to businesses with no connection to Colorado, according to the Denver Business Journal.

Pinnacol President Philip Kalin in June informed members of the Legislative Audit Committee about the carrier's plans to expand. He told WorkCompCentral at the time that a key difference between the latest proposal and a failed bid for privatization in 2012 was the addition of separate subsidiary writing policies outside of the state.

When Pinnacol in 2012 asked for permission to restructure and operate more like a private carrier, policyholders pushed back. They objected to the plan to pay off the state using $340 million in policyholder reserves. And they expressed concern that out-of-state exposure could drive up rates for Pinnacol's policyholders in Colorado.

According to the Business Journal, property and casualty carriers are opposed to the latest proposal. They say tax exemptions Pinnacol enjoys as a state-chartered carrier would give it an unfair competitive advantage.

Any change in Pinnacol's operations will require legislative approval. The 2016 legislative session begins Jan. 8.