Pinnacol Assurance plans to return $120 million to Colorado employers after workers’ compensation claims and costs came in lower than expected.
The dividend distribution comes on the heels of the recent effort by state legislators to tap $500 million of the insurer’s $2 billion in reserves to fund higher education.
But the dividend, the largest of five the insurer has made in the past five years, doesn’t represent a move to give policyholders their money back before state legislators can grab it, said Ken Ross, Pinnacol’s president and chief executive.
“It has nothing to do with the legislative activity,” said Ross. “We would have issued this dividend anyway.”
Pinnacol’s board discussed a dividend payout in November and again in February but waited on making the payout until an audit was completed in April, Ross said.
The possibility of the state tapping Pinnacol’s surplus came up in late March and got heated in April, when Attorney General John Suthers ruled such a move would be illegal.
Pinnacol has paid out dividends of $327 million since 2004 and cut premiums by 42 percent the past four years, saving employers another $205 million, Ross said.
As employers receive dividends and lower premiums, they are motivated to improve their safety records, resulting in lower costs, Ross said.
Gary Teague, owner of feed- lot operator Teague Diversified Inc. in Fort Morgan, expects to receive about $20,000 back.
About half the money will go back into additional safety programs and the other half to fund salaries.
“Any time you can get a dollar back from an insurance company, it is a good thing to have,” he said.
Dividend checks will go out to about 89 percent of policyholders and average $2,200. Those with high claims are excluded.
Aldo Svaldi: 303-954-1410 or asvaldi@denverpost.com
