INDIANAPOLIS (May 16, 2005)—Colorado’s Legislature effectively killed three bills that would have adversely impacted the ability of the state's Insurance Guaranty Fund to pay claims to insureds of insolvent workers compensation insurance carriers, according to a spokesman from the National Association of Mutual Insurance Companies (NAMIC).
The Colorado Insurance Guaranty Association (CIGA) pays workers compensation benefit in the event an insolvent insurance company cannot pay a claim. CIGA is not pre-funded; payments are made from current assessments of employers. If a significant number of insolvency claims are filed, the fund faces financial difficulty. Current law authorizes CIGA to seek reimbursement of workers’ compensation payments made on behalf of employers having a net worth in excess of $25 million.
NAMIC opposed SB 179, SB 192 and SB 225 because the bills would eliminate the requirement for employers who meet the net worth provision to reimburse the fund. The Senate Committee on State, Veterans & Military Affairs indefinitely postponed SB 179 on Feb. 15. The Senate Committee on Business, Labor and Technology indefinitely postponed consideration of SB 192 and SB 225 on March 14 and April 27 respectively.
“Colorado’s Legislature acted to protect the solvency and financial viability of the state’s Guaranty Fund,” stated NAMIC’s State Affairs Manager, Christian J. Rataj. “Employers need to be responsible corporate citizens and contribute to the Guaranty Fund that protects their injured workers.”