Colorado’s Pinnacol Under Scrutiny

Colorado’s dominant workers compensation insurer is defending its spending on travel and entertainment for its agents, telling Colorado lawmakers it’s good for morale and helps lower costs in the long run.

Pinnacol Assurance’s expenses have included $143,930 for a luxury suite at Invesco Field – home of the Denver Broncos; a $133,000 trip to the Four Seasons Resort in Scottsdale, Ariz.; and a $2,515 dinner, which included two plates of $144 lobster and three bottles of $115 wine.

Outside agents who sell Pinnacol’s policies, as well as some policyholders, are invited to games, trips and dinners to build relationships that make it easier for all sides to work together, said Jeff Tetrick, Pinnacol’s chief financial officer.

Some Democratic members of a legislative committee questioned the appropriateness of the spending. State Rep. Sal Pace, D-Pueblo, said he had trouble justifying such expenses to people in his district, where the median income for a family of four is $28,000 a year.

Pinnacol says it competes with private-sector carriers that spend even more on agents.

Republican members of the committee, meanwhile, praised Pinnacol for reversing deficits run up by a previous agency.

Sen. Shawn Mitchell, R-Broomfield, criticized lawmakers for suggesting that Pinnacol CEO Ken Ross be paid less than his $448,813 salary. “Pinnacol is a success story and we’re messing it up,” Mitchell said.

Lawmakers considered but ultimately rejected taking the company’s $684 million surplus to help balance the state budget.

The committee is looking at whether the company should have more state oversight or even be sold off. But it’s unclear whether lawmakers have the right to sell it.