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Feedback — No to Oregon Governor’s SAIF Raid Plan

Posted By Staff writer, Tuesday, April 9, 2019

Rich Kingsley was PIA Oregon/Idaho’s president from 2004 to 2005. He was, and still is very savvy politically. He recently sent Portland, Oregon’s daily newspaper, The Oregonian, a letter to the editor.

 

His concern? Governor Kate Brown’s plan to raid the reserves of the State Accident Insurance Fund Corporation (SAIF) to pay for the shortfall in the state’s PERS fund. PERS — as we all know — is not properly funded and the state is desperate to find a way to give the money promised by PERS to retired public employees.

 

The governor — and her SAIF fund-grabbing supporters — say SAIF has $1.4 billion in surplus that can be used to shore up PERS. 

 

Here are parts of Rich Kingsley’s letter to the editor. He asks some great questions. Some of which we will answer after you read what he wrote.

 

I was an Independent Insurance Agent in the insurance business for 37 years, writing mostly commercial policies for clients. I not only feel frustration, but extreme anger with the Democrats who want to raid SAIF.

 

In the late 1980's the legislature did just this same stupid “Raid SAIF” stunt. I think it was in 1996 or 1997 that a lawsuit against the State for ‘robbing’ funds from SAIF was settled, and the State was found culpable for taking money from SAIF. The State had to refund money to SAIF AND refund money to commercial clients that had to pay higher work comp rates thru SAIF, due to the State's robbing of those funds in the 1980's. The State not only had to return the funds, but interest for all the years the lawsuit went on.

 

When the funds were sent to be repaid back to commercial clients who had paid higher premiums, SAIF sent the checks to the agents who had assigned our work comp clients to SAIF, and we hand delivered the checks to our clients, who knew that we and our agent association [PIA Oregon/Idaho] had been highly in favor of penalizing the State for their act of stupidity in 'robbing' SAIF. Those businesses that had bought their work comp directly from SAIF received their checks in the mail.

 

It was a stupid stunt then, and to think of doing it again is still stupid, and reckless.

 

He then praises the newspaper for bringing to light the problems with this blatant theft of money that belongs to the state’s employers.

 

Kingsley is correct that the dollars in the fund that aren’t used for claims belong to employers. Many governor and Legislatures in states around the country are looking at their own versions of SAIF and those surplus funds to balance budgets.

 

The PIA Western Alliance state of Montana is the other state in our association where the Legislature has made a grab. PIA Montana and other groups and employers in the state oppose the taking of those surplus funds and a lawsuit was filed.

 

It will be heard in the Montana Supreme Court later this year or early next. Experts in Montana law believe the taking of the money from the Montana State Fund will be found unconstitutional and it will have to be returned.

 

To answer Rich Kingsley’s question. In the early 1980s, the Oregon Legislature had a budget crisis. It grabbed $80 million of SAIF’s reserves. A lawsuit followed and the Oregon Supreme Court said the state acted illegally and ordered the money returned.

 

With interest, $225 million was returned to SAIF and its policyholders. The attorneys fees and the cost of the litigation totaled a staggering $20 million.

 

The group opposing the Oregon governor’s SAIF funds plan includes PIA Oregon/Idaho. In their response to Brown’s plan the group said, “Doing so is nothing more than a Ponzi scheme. They [the governor and the Legislature] are literally stealing from one pot to cover liabilities in another and hoping that you can pay it back before something bad happens. That’s a dangerous game.”

 

In its response document, the group pointed out that those reserve funds are good for Oregon’s employers and Oregon’s economy.

 

“The premiums paid by Oregon employers are some of the lowest in the nation thanks to SAIF. It’s one of Oregon’s few competitive advantages. SAIF’s board and leadership are 100% local,” the group wrote. “They don’t operate like big corporate insurers and that’s proven to be a good thing for Oregon workers and employers alike.”

 

In addition to PIA Oregon/Idaho, these are the groups opposing Governor Brown’s plan.

Professional Land Surveyors of Oregon

Oregon Columbia Chapter of the Associated General Contractors

Oregon Economic Development Association

National Federation of Independent Businesses

Oregon Business & Industry

Economic Development for Central Oregon

Oregon Farm Bureau

Plumbing-Heating-Cooling Contractors Association

Oregon School Boards Association

Oregon Trucking Association

Oregon Home Building Association

Oregon Vehicle Dealer Association

Northwest Grocery Association

Oregon Metals Industry Council

Oregon State Chamber of Commerce

Oregon Wheat Growers

Oregon Seed Council

Columbia Gorge Fruit Growers

Oregon Power Sports Association

Northwest Automotive Trades Association

Oregon Manufacturers and Commerce

Far West Agribusiness Association

Oregon Association of Nurseries

Oregon Concrete & Aggregate Producers Association

Associated Oregon Loggers

Tags:  insurance content  insurance industry  insurance news  PERS  Raid the reserves of SAIF  SAIF 

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