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.
July 23, 2010
For those of you who missed our July townhall, it was on Amendments 60, 61 and Proposition 101 and featured the following guest panelists:
- Sheila MacDonald, President Solutions West
- Mark Neuman-Lee, Policy Analyst @ Fiscal Policy Institute
- William Stuart, Chief Academic Officer, Aurora Public Schools
- Henry Sobanet, former Budget Director under Gov. Owens
Supporters of these measures were hard to find in part because they have not filed any of their campaign finance reports, but after serial evasion of process service a Judge found Douglas Bruce linked to them.
Colorado will be facing record cuts next in addition to the recent $1.2 billion in cuts, even if these measures do not pass, but here is what you can expect if they do pass:
- $2.1 BILLION in lost state revenue
- Requirement to INCREASE K-12 by $1.6 BILLION
- But no net increase to K-12 because property taxes cut by 50%
- Requiring a state back-fill to K-12 which would force 99% of the General Fund to K12
- That would leave 1% of the budget for Corrections, Higher Education, Judicial, Attorney General, Legislature, Agriculture, Regulatory Agencies, Child Welfare, Medicaid, Transportation etc.
Proposition 60 reduces school district property taxes in half by about $1.5 BILLION each year which the state would be required to backfill, triggering a minimum of another $1.5 billion cuts in state services. This is a constitutional amendment and therefore not realistically changed if passed.
Proposition 61 prohibits state from incurring any new debt and imposes new limits on the amount of local government debt and requires taxes to be reduced when debt is repaid. While it may sound appealing, the effect is eliminate economic development financing in Colorado in the avenues that are most cost-effective, which is paying for use over time (like a car payment or mortgage payment). It also has the consequence of interfering with timing or delayed invoice payments (i.e. bill and pay in 30 days). This would require the state to cut its revenue by another $500 MILLION and local governments by $2.8 BILLION. This overturns several the results of several local elections and means about 36 school districts will have to cease new public school facilities. Those districts represent about HALF of the students in the State of Colorado This is a constitutional amendment and therefore not realistically changed if passed.
Proposition 101 is expected to reduce state revenue by $1.6 BILLION per year as a result of decreased income & sales tax, vehicle registration fees, telecommunications fees. Local governments will lose $936 MILLION in revenue from specific ownership taxes and local sales taxes. The School Districts will lose about $150 MILLION (which the state will have to backfill)
Aurora Public Schools would be expected to lose 40.17%, or $1,298.76 in funding PER student or approximately $42,845,335.
In many respects these measures would take Colorado to a funding level over 100 years ago despite our population of over 5 million people. The combined effect of these measures will be to cause an explosion in the size of any remaining K-12 classrooms and cause a new recession in the anticipated loss of 70,000 jobs.
It would also force closure of public higher / conversion to private higher ed, close all or most of state prisons in Colorado, stop capital development, public safety, economic development, infrastructure investment, senior services, child welfare.
These measures will save you potentially a few hundred dollars per year and will likely sound appealing but will destroy Colorado business, jobs, schools and families.
July 23, 2010
This morning CPC (academic clinical research trials specialists) announced it is joining The Stem Cell Research Center at the CU Anschutz Medical Campus in Aurora. This partnership will help bridge academic research with clinical applications in some key areas of concern to most people:
And it has the potential for saving lives and teaching us more about healthy living.
- heart disease
- cardiovascular illnesses
- Parkinsons
- cancer
- Alzheimers
The research at the Stem Cell center has discovered how to work with adult stem cells, "regress" them to embryonic state, "correct", grow and strategically use them in ways to replace one's own damaged cells with one's own cells that are not damaged.
This is by no means the only type of research that is going on, but this research is showing promise for restoring vision in corneal cell translants to some people who have been blind, stopping and shrinking cancerous growths (even where metastasized) by better differentiating be cancerous and non-cancerous stem cells, helping with neural degradation, blocked arteries -- you name it.
Seems real progress often comes in understanding not only the treatment or management of symptoms but understanding disease mechanisms so we can better prevent or at least cure many of those conditions that can be most disabling.
This is also good news for us regionally on the economic development front in that:
- it attracts research grants
- generates intellectual capital and property
- fosters new bio-business development
- employs more scientists and researchers
And it has the potential for saving lives and teaching us more about healthy living. This is good news for jobs, economic development, intellectual pursuits, health care and quality of life for potentially millions of people. While nothing is a "silver bullet" I think it is important to highlight progress where it is happening.
June 21, 2010
For those of you who could not make it, our last townhall meeting on June 17, was on "Money & Politics". We were extremely lucky to be joined by:
- Bernie Buescher, Secretary of State
- Jenny Rose Flanagan, Colorado Common Cause
- Jon Caldera, Independence Institute
- Martha Tierney, Election, Campaign Finance Attorney
The panelists covered a wide range of topics from how much money is spent on our elections, how the public can trace the money and where the current loopholes are. The panel discussed the impact of Citizens United US Supreme Court case.
As of the time of writing this post $2.3 billion dollars has already been spent on the 2010 election on campaigns. (www.opensecrets.org).
Yet, a series of U.S. Supreme Court decisions has opened the floodgates for money on politics. The original line of decisions decided that "money" was "speech" and the recent line of cases (Citizens United) went further to decide that "corporations" were also "people". The net effect is that the ability for wealthy individuals or rich corporations to bring an influx of cash to our elections is given a great deal of 1st Amendment protections.
Some of the issues raised are:
- Have we moved away from one person, one vote?
- If money is "speech", do rich people have more speech rights than others?
- If corporations are "people" do they in essence get 2 votes?
- Do limits on campaign finace contributions level the playing field or drive donations underground?
- Is the free flow of money in politics really just an extension of a "free market"?
- What are the possibilities of publicly financed campaigns to help reduce the role of special interest money in elections?
- Does special interest money influence access or shape public policy?
- How can regular citizens find out who is behind political ads?
Colorado has a few basic features as a part of campaign finance reform that you should know (that the voters approved):
- $400 limits a candidate can receive from an individual or PAC;
- Any contribution beyond that can not be coordinated with the candidate but could be spent as an independent expenditure;
- Colorado prohibited direct contributions from corporate or union treasury to candidates or from making independent expenditures from their direct treasury;
- Colorado law prohibits contributions from foreign individuals.
The decision in Citizens United removed the prohibition against corporations and labor unions making independent expenditures, which has opened up the prospect of potentially unlimited amounts of money from previously prohibited sources. SB 203 (M. Carroll - Weissmann) was brought to at least close the disclosure loopholes, however, Colorado voters will not be inundated with new sources of previously prohibited campaign transactions.
Tools for Voters: In order to know where and how to follow the money, every voter should be armed with the following:
- Secretary of State's website: provides state candidate, PAC, 527, Issue committee, small donor committee disclosure, and lobbyist disclosures and will now include independent expenditure committees. Their website is:http://www.sos.state.co.us/
- Follow the Money. org: this website provides great information about macro trends about who is donated where, to which candidates, and which parties. It is particularly helpful to identify the spending of various special interest groups. Their website is: http://www.followthemoney.org/
- Open Secrets. org: this website provides great information about macro trends about who is donated where, to which candidates, and which parties. It is particularly helpful to identify the spending of various special interest groups. Their website is: http://www.opensecrets.org/
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