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PIA Western Alliance knows you want to be the best in the field, and the best way to stay on top is to stay informed. PIA Weekly Industry News Brief is an informative e-news brief that delivers the most relevant industry content.

 

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PIA Oregon & Oregon Business Groups Begin Work Comp Surplus & PERS Battle

Posted By Staff reporter, Tuesday, March 19, 2019

A coalition of business groups — including PIA Oregon/Idaho — has formed to fight a proposal by Oregon Governor Kate Brown to take money from the state’s workers’ compensation program and divert it to the state’s growing PERS retirement funding crisis.

 

SAIF’s surplus — the coalition states — should not be used to help solve the $26 billion shortfall from the state’s PERS system. Opponents say Brown’s idea merely papers over a problem in need of a much different — and much better — solution.

 

The coalition points out that the quasi-public agency’s revenue’s come from the premiums of 47,000 small businesses, school districts, nonprofits and local governments. The surplus is used to assure that SAIF can easily handle work comp claims and a huge percentage of each year’s surplus is returned to the businesses purchasing the insurance from SAIF.

 

PIA Oregon Lobbyist Lana Butterfield said the governor’s actions are also very bad for PIA Oregon/Idaho’s member independent insurance agents, agencies and companies.

 

"Many PIA members serve small businesses. SAIF has stepped up to serve this community of small businesses that often have difficulty securing coverage,” she said in a statement to Weekly Industry News. “It provides a very reasonable price for a high level of worker benefits and safety. If SAIF reserves are swept, it is likely employer rates will increase substantially over time. This is not good for Oregon, small businesses or PIA members."

 

In a strategy paper created for the debate on the issue, the SAIF coalition said, the taking of surplus dollars will require “significant changes to SAIF’s operating structure and should be done after careful study rather than as a hasty bailout strategy for PERS.”

 

Plus, because of excellent management and the accumulation of large reserves, SAIF offers Oregon businesses some of the lowest workers’ compensation rates in the country.

 

Brown is not the first governor to consider taking surplus money from a state workers’ compensation program to offset budget troubles. PIA Montana member agents and PIA Montana have been contributing time and money to a coalition fighting a money grab by the Legislature that took $30 million from the state fund surplus. That money is to be used to shore up the state’s wildfire fighting efforts.

 

A lawsuit was filed by the coalition and the Montana Supreme Court should be ruling on the suit sometime later this year or early next.

 

Other than PIA Oregon/Idaho, these are the other groups involved in battling the governor’s ill-advised decision:

 

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


 

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Tags:  SAIF’s surplus — the coalition states — should not 

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Trump Budget & Crop Insurance Cuts — PIA National in Opposition

Posted By Staff reporter, Tuesday, March 19, 2019

PIA National is unhappy with President Trump’s 2020 budget. He’s proposing a 15% cut to the U.S. Department of Agriculture. The budget cut slashes funding for the federal crop insurance program by close to $26 billion over the next decade.

 

These are just part of huge cuts in Trump’s proposed budget. The president wants to reduce domestic discretionary funding by $4.7 trillion for fiscal 2020. At the same time, he is upping defense spending and is adding $8.6 billion for the wall along the Southern border.

 

These are the largest domestic spending cuts — ever.

 

The USDA budget cut is $3.6 billion and leaves it at $20.8 billion for the year. PIA National is concerned about three parts of the cuts:

 

  The first reduces the average premium discount for producers to 48%

  It is currently 62%

  Second, the budget has the target rate of return at 12%

  Third, it limits crop insurance eligibility to farms with an adjusted gross income (AGI) of less than $500,000

 

The Trump budget statement says the cuts are needed and it “proposes that USDA responsibly and efficiently use taxpayer resources by making targeted reforms to duplicative programs and overly generous subsidy programs.”

 

Gene Paul of the National Farmers Organization was one of the first to complain about the budget cuts. “We are very disappointed that the president takes the position that he does, but many of these cuts were discussed in the ag committees of both the House and the Senate when they put together the farm bill, and they were rejected,” he said.

 

He is also in agreement with PIA National on the importance of crop insurance and is deeply concerned about the cuts to the program. “Crop insurance is probably more important now than ever because of lower farm incomes and tariffs put in place by the president.”

 

He then added, “The president just doesn’t get it.”’

 

PIA National agrees. In a statement, the association said, “Crop insurance is the cornerstone of the farm safety net. During a time of depressed prices in rural America, now is not the time to slash the federal crop insurance program, which so many farmers and ranchers rely on to stay afloat. This budget proposal would make crop insurance unaffordable and unavailable for many people. Furthermore, a 5-year Farm Bill with strong support for crop insurance was just signed into law in December.”

 

PIA National said it will work with the House and Senate to make sure the cuts do not make it through Congress.

 

“We urge Congress to reject these cuts and to support a strong federal crop insurance program that recognizes the vital role that independent insurance agents play in the delivery of the program,” PIA National added.

 

Source links: PIA National, Carrier Management

 


 

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PIA National is happy with four bills just released by the House Financial Services Committee

Posted By Staff reporter, Tuesday, March 19, 2019

PIA National is happy with four bills just released by the House Financial Services Committee. They are a package containing important reforms to the National Flood Insurance Program (NFIP).

A hearing was held on the package — now titled Preparing for the Storm: Reauthorization of the National Flood Insurance Program — on March 13th.

 

Each of the bills pertains to one of four categories:

 

  Mitigation

  Mapping

  Administrative reform

  Reauthorization, debt forgiveness and affordability

 

PIA National submitted testimony for the hearing and said the association has advocated for several provisions included in this package. They include a long-term reauthorization, increased investment in mapping and mitigation, the creation of a consumer appeals process of FEMA mapping decisions and the inclusion of provisions to continue the program’s move toward risk-based rates.

 

Jon Gentile is PIA National’s vice president of government relations. He said, “Perhaps most important for independent agents is what PIA National has successfully prevented from being included in the draft package — a cut to the Write-Your-Own (WYO) reimbursement rate for insurers administering the NFIP.

 

Cuts to the WYO program would mean cuts to independent agent commissions. Gentile and PIA National worry that would lead to a mass exodus of qualified independent insurance agents from the program.

 

That could — if it happens — be devastating. As such, PIA National has consistently been the only independent insurance agent association that opposes a WYO cut.

 

“While the release of Chairwoman [Maxine] Waters’ draft package is only an initial step toward reauthorizing the NFIP, PIA National views the maintenance of the current WYO rate as an early victory for our unrelenting advocacy on this issue,” Gentile said and then added, “PIA National will remain vigilant on this issue throughout this process.”

 

One aspect of the proposed reforms is a push to drop the high cost of flood insurance premiums. Florida Democrat Rep. Charlie Crist wants all states to be able to offer a low-interest loan program created to help property owners flood proof their homes and businesses. He calls it the State Flood Mitigation Revolving Fund Act of 2019.

 

It has the support of several groups. Crist says it’ll save the taxpayer a lot of money and build communities more resilient to flooding — which, by the way — is the most prevalent form of disaster in the country.

 

The National Institute of Building Sciences said every dollar of hazard mitigation spending saves $6 in post-disaster costs. That comes from property not damaged from flooding, deaths attributed to storms and the dollars saved when communities can quickly get back to some sense of normalcy.

 

Missouri Rep. William Lacy Clay — a Democrat — and his Republican colleague Rep. Ann Wagner have been deeply involved in trying to get a five-year reauthorization done. They also want some permanent fixes.

 

“It’s a long-term problem that we need to solve, instead of coming up with these short-term fixes,” Clay said. “We all represent different regions — but in our region, our flooding is seasonal, it happens like clockwork. ... We need to approach this in a pragmatic way that resolves the issue.”

 

The current — and temporary — NFIP reauthorization ends at the end of May.

 

Source link: PIA National, PropertyCasualty360.com, Insurance Business America

 


 

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Consumers & Cybersecurity — Aware but Uncaring

Posted By Staff reporter, Tuesday, March 19, 2019

Every year Generali Global Assistance checks in with consumers about cybersecurity. The Cyber Barometer says consumers are very concerned about ID theft — theirs in particular — and data breaches. Less than 20% — however — say they have a clue on how to protect themselves.

 

Here are some stats:

  91% of Americans and 81% of Europeans say they consider a personal data attack very stressful

  47% say they are worried about ID theft

  This jumps to 49% when the consumer has elderly parents

  It goes to 54% when the consumer has children

 

Americans have the highest number of people who regularly update passwords. While that sounds good, it’s still a pathetic 37%. The bad thing is more should change passwords more often because data breaches — since 2005 — average close to two a day.

 

Experts worry that the staggering number — 9,033 during the time period 2005 to today — is driving consumers to apathy. That takes us back to the 37%. That means 63% of Americans don’t regularly change their passwords.

 

The good news:

 

  88% do protect their computers with ani-virus and anti-malware software

 

The bad news:

 

  Just half have the same protections on their phones and tablets

  They account for the devices used in 50% of the web traffic in the world

 

More bad news:

 

  48% say they don’t trust the businesses charged with protecting their information

  44% say they lack control over their information

  45% say they don’t know what to do if their personal information is compromised

 

Good news for insurance providers:

 

  37% say they like the idea of an insurance provider or a bank taking care of their data and keeping a list of what needs protected

  46% said they would purchase that kind of protection from an insurer

 

The bad news

 

  As noted earlier, close to 91% say they consider an attack on their identity as very stressful

  Yet only 33% take the basic protection steps

 

Again — the good news for insurers:

 

  That consumers won’t protect themselves or know how means they need insurance of some sort

 

Source link: PropertyCasualty360.com

Tags:  cybersecurity  Generali Global Assistance 

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How often you shut it down, can extend the length of time your phone works

Posted By Staff reporter, Tuesday, March 19, 2019

This is a reminder. Nothing urgent...but you never know when advice like this might help.

 

We think it’s a safe bet to say 100% of you have a smartphone. How much you use it is another issue, but you have one. For most of us, it is a lifeline to the career, staying in touch with business associates and clients, friends, and family. A huge percentage of us also use it for banking, shopping, booking flights, booking luncheons, dinners, meetings and on goes the list.

 

Oh — and there’s the old keeping of the calendar.

 

So the real question is, are you taking good care of your investment in a phone? Something as simple as how often you shut it down, can extend the length of time your phone works before it needs replaced.

 

Experts like tech-consultant Bob Motamedi say once a week shut it off for at least one-minute and then you’re good to go. Motamedi believes the weekly shutdown will help it retain memory, stop frequent crashes and it will run more efficiently.

 

Plus, Motamedi said the restart is also good for the apps you use each day.

 

“In most cases, the app isn’t really closed but rather, it’s put into a state where it can be restarted faster,” he said. “Now think about how many apps are open, slowly eating memory and battery power on the phone, and think about all those times you’ve thought that your phone drained entirely too fast that day.”

 

He also notes that phones crash for a number of reasons and not restarting it helps clog things up. Every app you open or install, every page you load and every update removes code from the operating system of the phone.

 

“Sometimes these remnants are incompatible or improperly removed after installation or un-installation,” Motamedi added. “Restarting your phone will eliminate most of these issues and will get your phone working better.”

 

He also pointed out that you need to drain your battery once in awhile. It’s good for the phone. “If you never let your battery drain fully, it will never ‘learn’ to recharge fully and will shorten the battery’s life,” Motamedi said. “It’s recommended that you let the battery drain down to 0 percent, and then refill it back up to 100 percent.”

 

You should also do the same thing for any laptops or tablets you use says Josh Davis of a company out of Illinois called Abt Electronics.

 

“After a couple of years of leaving your laptop plugged in all the time, you can expect it not to hold much of a charge at all when you go portable.”

 

Source link: MSN Lifestyle


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Tags:  can extend the length of time your phone works  cell phone technology  how often you shut it down 

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Update: California’s Wildfires

Posted By Staff reporter, Tuesday, March 19, 2019

Before we get to the myriad of problems facing California from wildfire, let’s take a quick look at a bipartisan push in Congress and the John D. Dingell, Jr. Conservation, Management, and Recreation Act.

 

It has been signed into law by the president and explores using drones to manage and fight wildfire, and instructs the Department of the Interior and the Federal Aviation Administration (FAA) to find ways to make it happen.

 

The law also tells the two departments to work with states to help them with their firefighting efforts. And the PIA Western Alliance states of California, Oregon, Washington, Montana, Idaho, New Mexico, Arizona, Nevada and Alaska — all devastated by wildfire — could use that assistance.

 

Meanwhile, in the Golden State, the California Attorney General’s office and the district attorneys of Sonoma, Napa, Humboldt and Lake Counties say they are not going to criminally prosecute Pacific Gas & Electric (PG&E) for the fires that devastated Northern California on October 8, 2017.

 

Those 20 fires killed 46 people and destroyed thousands of structures including homes and businesses. Over 100,000 people had to be evacuated.

 

While PG&E is off the hook criminally, and since sparks from its power lines during a storm with heavy winds caused the fires, it still faces billions of dollars in civil damage claims. In a joint statement, the district attorneys and the state attorney general’s office said, “Proving PG&E failed in their duty to remove trees was made particularly difficult in this context as the locations where the fires occurred, and where physical evidence could have been located, were decimated by the fires”

 

Meanwhile, investigators in Ventura and Santa Barbara counties have determined that power lines owned by Southern California Edison (SCE) banging together during high winds are the cause of 2017’s Thomas Fire.

 

It burned for a month and destroyed hundreds of homes.

 

In a statement on the 71-page report, the Ventura County Fire Department said, “A high wind event caused the power lines to come into contact with each other, creating an electrical arc. The electrical arc deposited hot, burning or molten material onto the ground, in a receptive fuel bed, causing the fire. The common term for this situation is called ‘line slap,’ and the power line in question is owned by Southern California Edison.”

 

Unlike, PG&E — who accepts the blame — Southern California Edison immediately refuted the report and said it provided key pieces of evidence that investigators ignored. SCE said the fire started 12-minutes before its system reported any troubles.

 

“SCE provided this evidence to CAL FIRE and VCFD investigators; however, the report does not suggest this evidence was considered,” the company said and noted the investigators did not take into account the 12 cameras in the vicinity of the fire’s origin but didn’t keep the footage from 11 of them.

 

“While SCE greatly admires the first responders and members of the firefighting community who bravely responded to the Thomas Fire, the company is disappointed that VCFD’s investigators failed to preserve critical evidence and seemed to ignore best practices in conducting their origin and cause analysis,” the company continued in its statement.

 

It’s clear to California Governor Gavin Newsom that changes are needed to how energy companies are regulated and is looking at making changes to the California Public Utilities Commission. It has been highly criticized for how it has regulated utility companies that are now being blamed for most of the state’s devastating wildfires.

 

The governor — says The Wall Street Journal — recently met with key legislators and analysts from S&P Global Ratings. The newspaper says the subject of discussions is energy company regulation.

 

Source links: FedScoop, Claims Journal, Santa Barbara Independent Record, CNBC

 

 

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Tags:  California Wildfires today  Conservation Management  Insurance content  Recreation Act 

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2019 PIA Oregon Idaho Conference & Tradeshow: Will you be joining us?

Posted By Staff reporter, Tuesday, March 19, 2019
 

CONFERENCE HOME  |  SPONSOR  |  EXHIBIT  |  VENUE   |  GOLF

 

Click the banner for more information!

 


BOOK YOUR ROOM ONLINE HERE

Or call Salishan direct at 800-452-2300 between 8 am and 6 pm. Tell them you are part of the PIA Conference to receive the conference rate that begins at $159 per night plus tax and reduced resort fee.

 
Room block is available until Friday, April 12, 2019

Salishan Resort | 7760 North Highway 101 | Gleneden Beach,Oregon 97388

 

 

 

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A.M. Best — P&C Income Up Dramatically 2018

Posted By Staff reporter, Tuesday, March 19, 2019

A.M. Best’s 2018 year-end report is called First Look: 2018 Property/Casualty Financial Results. Best said things — from a net income perspective — looked pretty good for insurers in 2018.

 

Net income made a huge jump from $36.2 billion in 2017 to $61.4 billion last year. That’s a staggering $25.2 billion rise. The report says fewer catastrophe losses and net investment income gains led the increase.

 

The report also noted rises in premiums written and earned outdistanced losses and expenses. That led to a 4.4% improvement in the combined ratio. It went from 103.7 in 2017 to 99.3 last year.

 

Here’s more:

  Catastrophe losses — the report says — account for 5.9 of the combined ratio points

  That’s down from 10.1 in 2017

  Net income improved and $6.2 billion in additional contributed capital got offset by a $99.7 billion decline in unrealized gains and $5.5 billion in additional stockholder dividends

  The industry surplus — as a result — dropped 0.6% to $741 billion

  Net investment income rose 17% to $57.4 billion in 2018

  It was $49 billion in 2017

  There was a 10.1% rise in premiums earned and it sat at $581.4 billion

  In 2017 that figure was $528.3 billion

  Net written premiums in 2018 rose to over $600 billion compared to $540.5 billion in 2017

 

Source links: A.M. Best, Carrier Management

Tags:  First Look: 2018 Property/Casualty Financial Resul 

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Around the PIA Western Alliance States

Posted By Staff reporter, Tuesday, March 19, 2019

 

Idaho

PTSD Comp Bill

 Idaho Governor Brad Little has signed a bill into law to give workers’ compensation to first responders who suffer from post-traumatic stress disorder. The responders — says the bill — must prove they have a mental injury related to an event they experience while on the job.

 

The new law says the responder must be “examined and subsequently diagnosed with post-traumatic stress injury by a psychologist” or similar medical professional. Clear and convincing evidence of PTSD must be demonstrated to get the designation.

 

Source link: Business Insurance

 

Medicare Workshops to be Offered in Burley

 A pair of Medicare Workshops for individuals turning 65 and those approaching Medicare eligibility will be held Monday, March 18, at the Burley Public Library, 1300 Miller Ave., Burley. 

 

The first of the two free sessions will run from 1 to 3 p.m., followed by an evening workshop from 5 to 7 p.m. Caregivers, those interested in learning how Medicare works, and individuals not eligible for Medicare are encouraged to attend and learn about other health plan options from a local enrollment counselor.

 

The Medicare workshops will be led by Senior Health Insurance Benefits Advisors (SHIBA), a unit of the Idaho Department of Insurance.  SHIBA presenters will introduce the various parts of Medicare and explain some of the vocabulary associated with the program.  Topics to be covered include:

 

  Timeframes for enrolling in Medicare

  Enrollment periods for Medigap, Medicare Advantage and Prescription Drug Plans

  How the different parts of Medicare work together — and when they don’t

 

To register for either workshop, please contact the SHIBA Helpline at 1-800-247-4422.  Walk-ins are also welcome.

 

New Mexico

Recreational Marijuana: The New Mexico Senate is rapidly acting on a recreational marijuana bill passed by the House. If passed by the Senate and signed into law by the governor, it will be legal to possess up to an ounce of marijuana to use recreationally. You must — however — be 21 or over.

There will be an up-to-17% tax on the sale of pot to consumers.

 

Source link: Insurance Journal

 

Oregon

Health Care Funding

 Governor Kate Brown signed House Bill 2010 into law. The bill is the first piece of her priority legislative proposal for sustainable, long-term health care funding to ensure Oregonians have access to affordable health coverage.

 

“House Bill 2010 is a significant step forward in ensuring every single Oregon has access to affordable health coverage,” said Governor Brown. “But HB 2010 only covers a portion of what we need for our health care system. So, as we celebrate today, we need to immediately turn our focus to filling the rest of the Oregon Health Plan funding gap.”

 

House Bill 2010 includes:

 

  A hospital assessment, generating $98 million for the Oregon Health Plan (Oregon's Medicaid program)

  A health insurance assessment and managed care tax, generating $334 million for the Oregon Health Plan and the Oregon Reinsurance Program, which helps stabilize insurance rates for individuals who buy coverage through the private market

  To provide the rest of the needed funding, Governor Brown has proposed an $2-per-pack increase in the cigarette tax, a tax on e-cigarettes, and the creation of an assessment on employers that do not provide affordable coverage to their workers.

 

“Securing this funding package will ensure Oregonians continue to get the health care coverage they need to thrive and will enable a balanced budget for the Oregon Health Plan for the next six years,” Governor Brown said.

 

Washington

Costco & $3.6 Million in Taxes

 NW Re Limited, of Phoenix, has settled (PDF, 3.6 MB) with Washington state Insurance Commissioner Mike Kreidler to pay $3.6 million in unpaid premium taxes, penalties, interest and a fine. NW Re’s sole insured and parent company is Costco Wholesale Corp., headquartered in Issaquah, Wash.

 

NW Re self-reported its unauthorized activity in December 2018 as part of Kriedler’s project to identify all captives that insure assets in Washington state. It provided deductible reimbursement for Costco’s liability and workers’ compensation from 2000 until 2019 without authorization.

 

It paid $2.4 million in unpaid premium taxes and $1.2 million in fines, tax penalties and interest on March 8.

 

Kreidler announced a project in December 2018 to identify all captives doing business in Washington state. Captives must self-report before June 30, 2020 to be eligible for reduced fines and premium tax penalties.

 

Fines and penalties increase every six months for captive insurers that fail to self-report, starting July 1, 2019. Captives that do not self-report before June 30, 2020, will face the maximum fines and tax penalties.

 

Kreidler’s office has collected about $4.4 million in agreements with captive insurers. He reached a settlement of $876,820 with Cypress, the captive insurer for Microsoft Corp., in August 2018.

 

State law requires that when risk is insured in Washington state, it be done through an admitted insurer or through an unauthorized insurer placed through a licensed surplus line broker. State law also requires insurance companies to pay a 2 percent tax based on their written premiums. The tax revenue is sent to the state general fund to pay for government operations. 

 

Source link: Washington Department of Insurance

 

Opioid Lawsuit

 Washington State has become the 10th state to sue the major distributors of opioids. The suit accuses the distributors of making billions off the sale of opioids while all the while ignoring the thousands becoming addicted to the drugs.

 

Washington Attorney General Bob Ferguson filed the suit last week in King County Superior Court. The suit involves:

 

  McKesson Corp.

  Cardinal Health Inc.

  AmerisourceBergen Drug Corp

 

Washington is also one of many states suing Purdue Pharma.

 

Ferguson contends the drug firms brought oxycodone, fentanyl and other opioids into the state and failed to comply with requirements that spots suspicious orders destined for the illegal drug market. “For years these companies illegally shipped suspicious orders into our state,” Ferguson said. “Their conduct, put quite simply, fueled the state's opioid epidemic.”

 

Ferguson notes that between 2006 and 2017 over 8,000 people in Washington died from opioid overdoses, auto crashes or shootings. While all that was happening, he said the drug distributors continued to pour more than two-billion pills into the state.

 

As it stands now there are over 1,000 lawsuits filed against the manufacturers, distributors and others involved in the crisis.

 

Source link: Q13 FOX

Tags:  Around the PIA Western Alliance States  Industry news  Insurance Content 

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Oregon Backlash — Criticism of Governor’s Work Comp Fund Grab

Posted By Administration, Tuesday, March 12, 2019

Oregon Governor Kate Brown — and many in the Oregon Legislature — are desperate to find an answer to the state’s growing PERS pension debt. Brown has proposed raiding Oregon’s quasi-public workers’ compensation corporation, the State Accident and Insurance Fund (SAIF).

Her idea is to grab about $1.4 billion from SAIF’s policyholder surplus. That money will be invested in a different account and the earnings will be used to offset the pension costs of PERS. To make a dent in that debt — Brown and the Legislature — will need that account to bring in about $3 billion by 2021.

As it stands now, Oregon’s PERS system is facing a $26 billion deficit and that deficit is growing. The added debt is increasing costs for schools, municipalities and government agencies.

The SAIF option being considered by the governor was part of a number of suggestions offered in 2017 by a task force Brown set up to explore ways to cut PERS costs. At the time — and while facing reelection — Brown opted to say no to the idea.

Now that — some say — she’s been reelected, the SAIF offer is on the table.

Oregon Republicans and businesses didn’t take long to go on the offensive. One of their criticisms is how Brown has gone about setting this up. The governor’s chief of staff Nik Blosser and her legislative director met with retired insurance executive Pat Kilkenny and Endeavor Capital’s John von Schlegell about ways to reduce PERS unfunded liability.

One of the options discussed is selling SAIF.

Kilkenny — according to Blosser’s notes — introduced the team to TigerRisk Partners. It is an insurance mergers and acquisition specialist. In an email back to the governor’s office, company head Tony Ursano said, “We would love an opportunity to come out to Salem and introduce ourselves, our firm and our preliminary perspectives on SAIF,” he wrote. “I believe we are uniquely positioned to offer the State of Oregon insightful, thoughtful and objective advice about the strategic alternatives available to SAIF.”

Strategic alternatives — as some assume — means, “we’ll buy it.”

Until now neither Brown nor her staff have commented on the proposal. Spokeswoman Kate Kondayen of the governor’s office said Brown is trying to balance ways of addressing the PERS deficit with stabilizing the cost of Oregon’s education system. Kondayen said Brown “has no intention of selling SAIF or taking any action that will weaken SAIF’s strong safety programs or benefits for workers.”

Some in business circles disagree with Kondayen’s assertion that Brown is concerned about the overall debt of PERS. They think Brown just wants to keep pension costs down for schools and what she really wants to avoid is having the $2 billion corporate tax increase — that is likely to be passed in this session of the Legislature — eaten up by PERS costs.

Legislators and the governor want that money to go into classrooms.

Republicans say this is a bad idea for a number of reasons. Oregon business has some of the lowest workers’ compensation rate in the nation because of SAIF’s structure and its surplus. Policyholders have received dividends from the surplus over the last decade and do not want the governor’s grab to affect those dividends.

In 2017 SAIF sold $526 million in premiums. Losses were $393 million. That means SAIF had a $133 million underwriting profit. Investment income came in at $171 million.

As a result, 30% of the premiums shelled out by businesses — some $160 million — was returned to them. At the same time the underwriting profit pumped up the surplus to close to $2 billion.

So the $1.4 billion is quite a hit.

SAIF’s spokeswoman Lauren Cansler said, “Our capital base allows us to do what we do. It provides safety and security for our policyholders and injured workers, and it enables us to keep prices low and service levels high.”

House Republican Leader Carl Wilson of Grants Pass said the Democrats are working a shell game that could — eventually — lead to higher work comp costs and could put workers at risk. “The Governor’s proposed indiscreet confiscation of SAIF’s reserves is a smash and grab, endangering hardworking Oregon wage earners,” he said.

By the way, apparently this is not the first time SAIF’s surplus has been the target of a governor. In the 1980s, then Governor Victor Atiyeh grabbed $81 million from SAIF to balance the state budget after the Legislature failed to do so.

SAIF challenged the decision and class action suits were filed. The Oregon Supreme Court finally got the case and said the taking of the funds was illegal and it ended up — after interest payments and all — costing the state $225 million to repay.

Today, since the law was changed by the Legislature in 1982, the governor — or the Legislature — can tap those funds to “direct legislatively the disposition of any surplus in excess of reserves and surplus deemed actuarially necessary according to recognized insurance principles.”

If Brown and the Legislature decide to take the $1.4 billion, it will no doubt be challenged in court as was a recent decision in Montana when the governor grabbed money from the Montana State Fund to fix a budget hole.

Source link: OregonLive.com

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A special thank you to our KKlub Members for their support.