Monday, March 22, 2010

Stakeholder Concerns Grow Over Process and Substance of Possible Pinnacol Deal

Denver, Colorado – March 22, 2010 – A diverse group of stakeholders in Colorado’s system of workers compensation insurance has formed the Colorado Accountability Project (CAP) to scrutinize and raise public awareness of a possible deal to privatize Pinnacol Assurance, the state sponsored workers compensation insurance company.

“The Colorado Accountability Project represents the coming together of business, policyholder, worker, and taxpayer interests,” said John Berry, president of the Workers’ Compensation Coalition. “We all share the same goal of wanting to ensure transparency and accountability in how possible changes to the workers compensation insurance system come about, and to make sure of fair treatment for those most affected by those changes.”

The numerous questionable aspects of the proposed deal include:

· Whether Pinnacol is legally authorized to offer the state a “payout” for privatization given any payout funds likely belong to policyholders

· How the Pinnacol board – which is appointed by the governor – can represent both the state and Pinnacol in approving a deal, and

· Whether the valuation process will fairly treat taxpayers.

Media reports in recent weeks confirmed ongoing talks between the office of Governor Ritter and Pinnacol executives on the possible privatization of the company. The reports revealed advanced discussions have already taken place on possible valuation of the company and terms for compensation to the state based on unreleased analysis by the investment banking firm Morgan Stanley. Goldman Sachs has also been identified as an advisor to Pinnacol. A process for ongoing involvement by Pinnacol stakeholders has not been offered or even intimated by either the Governor’s office or the company.

“We are contemplating the sale of one of the state’s largest assets with far reaching implications for millions of Coloradans, including every single taxpayer,” Berry said. “Yet so far the whole deal has been approached more like a transaction between two private parties, which it most certainly is not.”

At minimum, CAP requests that Pinnacol outline a stakeholder engagement process and guidelines for the release of information relevant to any proposed transaction. To date, no process has been established for release of information such as the Morgan Stanley report or for collection of public input.

“There are myriad unanswered details on the proposed Pinnacol deal, many of them involving questionable assertions by the company,” Berry concluded. “Given that there are formal public input processes on government projects ranging from the renaming of parks to the rebuilding of highways, it would seem a transaction of this magnitude should at the very least merit the same kind of public input and access to information.”

No comments:

Post a Comment