12:30pm

Fri August 5, 2011
Business

Pinnacol Withdraws as State Employee Claims Administrator

The embattled state-owned workers' compensation insurer of last resort has withdrawn as the administrator of state employee claims, forcing Colorado to hire an independent contractor.

State Risk Manager Markie Davis says Pinnacol informed Colorado earlier this year of its intent to stop offering the services to all clients--including the state.

"We started the RFP process in March and we had a contract in place with Broadspire at the end of May," she said.

It’s unclear how much this will cost the state. The change also impacted the city of Arvada and the Northern Colorado School District Workers' Compensation Pool. Pinnacol Spokesperson Suzi Stolte says administering claims was incredibly labor intensive.

"So for that reason we made the decision to discontinue this," she said.

Stolte says Pinnacol will still continue to provide workers compensation insurance. Meantime, Governor John Hickenlooper told the Denver Post this week that he plans to revisit a proposal to privatize Pinnacol, which is a quasi-governmental agency. A related effort died this past legislative session.

Pinnacol has had a rocky relationship with the state after company officials were challenged last year over reports of lavish spending and excess profits.