|Author||Subject: Wouldn't want to hinder insurance company's right to steal|
|Tarzan|| Posted At 21:29:01 05/10/2001
Scrutiny of Saif Corp. increases
A bill calls for an audit of the state's workers compensation insurer.
A newly created board will audit Saif Corp. the state owned workers compensation insurer to determine how much money the agency needs to pay on standing claims and much it should salt away in case this claims estimates are inaccurate.
House bill 3980 which a house committee passed Wednesday night, would require Saif to pay for the audit and the boardís expenses. The board would determine the scope of the review, and Saif would have to provide any information the auditors requested.
What the bill doesnít do is perhaps more interesting.
Itís is a watered down version of a proposal by Saifís chief competitor, privately held Liberty Northwest Insurance., to crimp Saifís ability to pay hefty dividends to its policyholders. Liberty had wanted lawmakers to tap Saifís future investment interest earnings to create a rainy day fund as a cushion for the state against an economic downturn.
HB3980 doesn'tí touch Saifís current holdings or future interest earnings. But the bills proponents expect the audits will bolster their claim the Saif unfairly dominates the market by using earnings on its $2.7 billion in assets to pay fat dividend checks to employers.
This is the first definitive recognition by the Legislature that this is a serious problem on which they need independent in format. said Fred VanNatta a lobbyist for the Liberty Northwest We're delighted the process has started.
Saif says itís merely following its mission to hold down insurance costs and said additional oversight is costly and unnecessary. the agency already is audited by the Department of Consumer and Business Services and secretary of state.
Saifís President Kathy Keene also was concerned about the billís requirement that Saif provide any information request by the firm hired to do the audit. Saif has resisted attempts by lawmakers and lobbyists to determine how the agency establishes its prices for various insurance categories, saying the information is considered a trade secret and is exempted under the stateís public records laws.
We provide an annual report to the Legistlatu4e, and no oneís ever asked for anything she said. This is all a manufactured controversy.
Members of the houseís smart growth and commerce committee resisted the idea of taking money from Saif's future interest earnings, but several said they thought a new board was necessary to evaluate Saif's dividend payments.
A board of directors appointed by the governor currently oversees Saif. Beyond direction a new audit, HB3980 doesnít specify what additions duties the new board would have. Members would include the state treasurer, secretary of state, a member of the Saif board and three people appointed by the governor.
I think weíll find Saif is doing its job, said Jerry Krummel R Wilsonville, but there is a duopolistic system and we need to understand what the ramifications of such a system are.
A study ordered by an interim legislative committee and unveiled last week said Saifís ability to pay its policyholders large dividends could jeopardize small insures ability to compete in Oregon's workers compensation insurance market.
But the study also said Saif's dominance of the market hadnít hurt Liberty's profits.
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