Workers’s comp agency discussions continue in Oklahoma
Courts may be asked to decide insurer’s fate

Oklahoma’s legislators should find out whether the state or policyholders will get the money if the state’s workers’ compensation carrier is sold to a private insurance company, members of a task force looking at privatizing CompSource Oklahoma said Wednesday.

Rep. Dan Sullivan, co-chairman of the task force, said a bill will be filed in the upcoming session stating that the financial assets of CompSource belong to the state. Its intent will be to draw a lawsuit that would allow the courts to settle the matter.

"I get the sense that there are those who have their petitions ready,” said Sullivan, R-Tulsa.

"If it is an asset of the state, then I think we have an obligation to further explore that and to do what we can do to maximize the benefit to the state,” he said. "The last thing that we want to do is sell an asset that creates a bigger problem.”

Task force members said they will lean to selling CompSource if it is determined the state will get the money from a sale. It’s estimated CompSource could fetch $200 million to $350 million. If it is determined proceeds from the sale will go to CompSource policyholders, then it would be better to mutualize the company, they said.

The state Supreme Court in 1975 ruled lawmakers could not use cash reserves from CompSource and appropriate that for state operations, leaving some task force members to believe money obtained through a sale of the agency would go to policyholders.

A state law passed this year states it is the intent of the Legislature to privatize CompSource no later than Dec. 31, 2010. Options include selling CompSource, which has about 300 employees, or mutualizing it, meaning it would be owned by its members.

The Oklahoma Public Employees Association, meanwhile, said it is concerned about the effort to change CompSource. The group has sent a letter to all legislators asking them to look into the matter.

"CompSource is solvent and is serving businesses as well as government entities,” said Sterling Zearley, the association’s executive director. "This (privatization) is being driven by insurance lobbyists, many representing out-of-state corporations, who don’t want CompSource as a competitor.”

Sullivan and Sen. Cliff Aldridge, R-Midwest City, the other co-chairman of the task force, said Wednesday they have no problems with how CompSource has been operating.

"Government should not be involved in businesses that the private sector can do,” Aldridge said.

CompSource does not receive state appropriations but is considered a state agency. It provides workers’ compensation insurance to businesses that cannot or choose not to obtain the required insurance through private companies.

It provides workers’ compensation insurance to most state agencies and to various public entities, such as school boards, cities and counties.

CompSource writes about 35 percent of the workers’ compensation policies in the state. Other employers are self-insured or are insured by private companies.

Task force members Michael Clingman, the state finance director, and Mike Seney of The State Chamber said they remain concerned that small or new businesses may see their workers’ compensation rates eventually go up significantly if CompSource were sold.

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