Fact vs Fiction

In 2009-2010 many misleading statements were made about Pinnacol Assurance. Some of these statements are addressed in the Fact vs Fiction chart below.

Fiction

Fact
Pinnacol Assurance is state-run/state-owned and, therefore, the state is entitled to Pinnacol’s assets. Pinnacol Assurance is not a state agency, and it receives no state funding. By law, Pinnacol is run as a mutual insurance company, meaning that the company holds the assets in trust for the benefit of its policyholders.
Taxpayer dollars fund Pinnacol’s operations/Pinnacol receives funding from the state. Pinnacol receives no state funding. In fact, the law requires Pinnacol to be self-sustaining and, therefore, does not expose the state to financial losses.
Pinnacol has a large surplus because it has been overcharging policyholders and hoarding funds. In the last four years Pinnacol has lowered rates by 42%, saving policyholders more than $212.5 million dollars.In the last six years Pinnacol has returned dividends totaling more than $394M to policyholders in every county in Colorado.
Pinnacol insures 70% of Colorado businesses. Pinnacol insures approximately 55,000 policyholders. This represents 57 percent of the market share. This is not a percentage that Pinnacol determines.
The surplus is six times over and above what the Division of Insurance says is needed to ensure the solvency of Pinnacol’s operations. Pinnacol has not received notification from the Division of Insurance stating what level its surplus should be. Third-party actuaries review Pinnacol's company’s financials every quarter and they re-recommend the level of reserve, based on current claims histories and future claims potential.
Pinnacol is a “political subdivision of the state” under 8-45-101 (1), C.R.S. This is an incomplete description of Pinnacol Assurance. By law, Pinnacol is run as a mutual insurance company and the company holds the assets in trust for the benefit of its policyholders. Pinnacol is not a state agency, and it receives no state funding. In fact, the company is required to be self-sustaining and, therefore, does not expose the state to financial losses.
Pinnacol is licensed by the state of Colorado. Pinnacol was created by statute in 1915 and, therefore, is not licensed as other carriers are.
Pinnacol has governmental immunity. No. Pinnacol does not enjoy governmental immunity. Its officers can be sued just like officers of any private company.
Because Pinnacol does not pay taxes, the state has lost out on billions of dollars in revenue. It is true that Pinnacol does not pay taxes, however, that is not all the story. We are tax-exempt because we are mandated to cover the residual market — those businesses that cannot get coverage from other carriers. We also provide coverage to some of the state's most dangerous occupations — coverage that other carriers don’t want to insure because of the risk involved. Many of those businesses would not be operating — and paying taxes — without Pinnacol to ensure them. The money generated from those businesses far exceeds the amount of Pinnacol’s tax-exemption.