The force continues to privatize state compensation funds, with supporters exploiting the benefits of creating a competitive market and opponents expressing concern about the effects on the remaining compensation market.
Several states have seen such transformations in the last ten years. , Including Arizona, Maryland and Oklahoma, and legislative efforts are now underway in Colorado and Missouri to follow suit.
On March 5, Republican lawmakers in Colorado introduced H.B. 1432, which proposes the privatization of state-funded Pinnacol Assurance, which guarantees about 40% of the state labor compensation market.
Efforts to privatize Pinnacol were proposed at the latest in 201
In 2016, the state chartered insurance company proposed to form a subsidiary to sell workers' compensation to other states while remaining the last resort insurer in Colorado. That effort also failed.
The privatization of government funds is a trend that has been going on for decades, says Robert Hartwig, clinical associate professor and director of the Risk and Uncertainty Management Center at the University of South Carolina at Columbia.
"There is a general perception that the concept of a government fund is a bit of anachronism," he said. "There may be legitimate problems with the management and financing of a remaining market mechanism, but if we look across the country, we can see that there are proven processes for managing the remaining market."
Under the terms of the Colorado bill, the state would receive a one-time payment of $ 305 million for the sale of its stake in Pinnacol.
"Workers comp is a very competitive line that is increasingly dominated by national players that offer several lines", said Pinnacol's President and CEO Phil Kalin in an email. "This means that Pinnacol is on a shrinking platform and ultimately fewer workers who benefit from our care and coverage."
Mr. Kalin noted that 30% of the new business applications in the 2020 state were for companies with multistate operations that Pinnacol could not service without the policyholder having to apply for another insurance company for workers covering outside Colorado.
"And if COVID has shown us anything, it is that office-based workers can work anywhere," he said.
On January 12, a Republican lawmaker introduced Missouri HB 761, which would require the state-controlled Missouri Employers Mutual Insurance Co. transferred to a private mutual insurance company.
The bill would require the board of Columbia-based Missouri Employers Mutual outline steps to convert to a private mutual insurance company in early 2022.
The same legislature presented an almost identical bill in early 2020 that died on the committee.
A spokeswoman for Columbia, Missouri-based insurers said she did not expect the bill to pass. The legislation has been read twice in the House but has not yet been assigned to a committee.
Steve Bennett, Vice President of Work Compensation Programs and Advisor to the American Property Casualty Insurance Association, who has publicly supported state-funded privatization work in the past, sees privatization as a way to create a level playing field.
“What we want is a situation where the state fund is clearly privatized and the remaining market is taken care of in a system that is fair. to all private insurers – the state fund would not keep the remaining market, he said.