Newspaper article THE JOURNAL RECORD

State of Oklahoma Could Net $150M from CompSource Oklahoma Sale

Newspaper article THE JOURNAL RECORD

State of Oklahoma Could Net $150M from CompSource Oklahoma Sale

Article excerpt

The state government could net between $150 million and $200 million if it sells CompSource Oklahoma rather than making the state workers' compensation insurance carrier a mutual insurer, a task force was told Wednesday.

"There is no question that CompSource is a state agency, and if it is a state agency, its assets have to go to the state if it is dissolved," said Lance LaGere, chief operating officer of National American Insurance Co.

LaGere acknowledged that NAICO would be a potential bidder if the state chooses the sale route for privatizing CompSource.

He said the successful bidder for CompSource should be required to take on all assets and liabilities, freeing the state of all exposure.

LaGere said workers' compensation rates have dropped in states such as Texas, West Virginia, Nevada and Michigan, which have privatized their state-operated carriers. Although some privatizations of state workers' compensation carriers resulted in mutual insurance companies, LaGere said the sale of Michigan's fund resulted in more than $250 million for the state.

Some prior task force meetings have focused more on the mutualization idea, in which the surviving entity would be owned by its members.

"Why give away a state asset?" LaGere asked lawmakers and other panel members.

He also contended that a policyholder-owned CompSource could trigger a significant liability for income and insurance premium taxes and assessments.

LaGere said CompSource had a net loss of $16 million last year, $12.2 million during the first six months of this year. If that continues, he said, CompSource will be forced to increase policyholder rates.

A 15-percent to 20-percent detrimental change in its assets or liabilities could threaten CompSource's solvency, he said.

The successor to CompSource was formed as an insurer of last resort for businesses needing workers' compensation coverage.

State Rep. Dave Dank, R-Oklahoma City, said that Oklahoma's 20,000-plus small employers and their workers should continue to be protected under any new structure. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.