Pinnacol Assurance and the Colorado Division of InsuranceReach Agreement on Filing Issues

DENVER, August 24, 2010 – Today, Pinnacol Assurance and the Colorado Division of Insurance (DOI) reached an agreement concerning filing issues raised by the DOI earlier this year.

The terms of the agreement, which was approved by the Pinnacol Board of Directors this morning, are:

  • Pinnacol will maintain the minimum premium threshold it currently uses to qualify policyholders for schedule rating. Schedule rating is a method of pricing insurance that adjusts premium based on relative risk. It is approved by the DOI and used by all Colorado insurance carriers.
  • Effective January 1, 2011, Pinnacol will make adjustments to some of the factors it uses to price policies.
  • To correct a 2002 non-filing that was identified in a recent audit, Pinnacol will, over the next year, credit current policyholders who are schedule-rated a total of $15 million.
  • Credits will be issued against renewal premiums beginning in January 2011 and will be based on the pro-rata size of the policyholder’s premium.
  • Pinnacol will pay a penalty of $80,000 to the Division of Insurance for the 2002 non-filing.

According to Dan O’Neil, Pinnacol’s vice president of business operations and general counsel, the non-filing was an oversight in Pinnacol’s overall 2002 rate filing. “We now have a director of corporate compliance who is responsible for all aspects of regulatory compliance including all necessary filings required by the DOI. Having an individual on staff with those responsibilities will ensure that this type of filing oversight does not happen again.”

The $15 million policyholder credit is less than one percent of the $4 billion in premiums Pinnacol collected between 2002 and 2009.

“Pinnacol takes full responsibility for the 2002 non-filing and agrees that all the terms in the agreement are in the best interests of its policyholders and Colorado’s workers’ compensation market,” added O’Neil. “We thank the DOI and Attorney General’s office for working with Pinnacol to resolve these issues.”

In resolving this issue, the DOI did not find that Pinnacol’s rates were excessive, inadequate or unfairly discriminatory.

This agreement also resolves four of the recommendations that were identified in Pinnacol’s recent Performance Audit. “We continue to work on the other recommendations and will report on our progress in those areas at the September meeting of the Legislative Audit Committee,” O’Neil said.

About Pinnacol Assurance
Pinnacol Assurance is Colorado’s leading provider of workers’ compensation insurance. Pinnacol provides comprehensive, competitively priced coverage; immediate attention to claims; a highly qualified network of medical providers; and proactive safety programs to approximately 54,000 Colorado businesses. Over the past six years, Pinnacol has returned nearly $394 million in general dividends to its policyholders statewide ― a mark of the company’s stability and strong financial health.

Contact:
Suzi Stolte
Associate Vice President, Communications and Public Relations
303.361.4777
suzi.stolte@pinnacol.com