Now some politicians and lawmakers believe Oklahoma shouldn't be in the business of writing workers' compensation insurance and that a state agency like CompSource should not compete with private insurers.  Sounds rather relative to the debate now brewing in California between individuals, lawmakers, and other politicians--culminating in a recent intent to sue by California Insurance Commissioner, Steve Poizner.

Poizner, who has now formally announced he will sue the state of California to block the sale of $1 billion in California's State Compensation Insurance Fund's assets, vociferously opposes the plan for the sale endorsed by California governor Arnold Schwarzenegger. 

An Oklahoma legislative task force is now considering selling CompSource or else mutualizing it, meaning it would be owned by its members.  CompSource has about 26,000 policy holders and writes 35 percent of workers' compensation policies in the state.

Some insurance executives from Nevada were present at a recent meeting of the Oklahoma legislative task force, and expressed that Nevada's work comp rates have dropped since their state agency was privalized 10 years ago.

"We believe that what we did in Nevada worked very well for us," said Douglas Dirks, president and CEO of Employers Holdings, Inc., the modern private insurer which metamorphasized from the former Nevada state agency.  The company's share of the workers' compensation insurance market fell from 65 percent to just 6 percent, but Employers Holdings now provides insurance to small businesses in 30 states, Dirks said.

Dirks also said Nevada officials opted to mutualize its agency after deciding against a stock company because the state is prohibited from owning stock in a private company.  Nevada opened up its workers' compensation insurance market when it transformed the agency from a monopoly to a mutual insurance agency owned by its policy holders.

"Rates have gone down fairly consistently since the market was opened, " Dirks added. 

Nevada officials worked with the Internal Revenue Service to determine that policyholders' share in the new mutual company would not be a taxable transaction and obtained guarantees that all the agency's workers still would have jobs with the state, said Ann Nelson, executive vice president of Employers Holdings.

"Every single one of our employees found a home," she said.

The statute creating the Oklahoma legislative task force requires that it submit a report of its findings to the governor and legislative leaders by Dec. 1, including suggestions for any legislation. The statute says lawmakers intend to privatize CompSource no later than Dec. 31, 2010.

Still, the report may recommend the idea be studied longer.

"I think it can work but it has to be done right,"  said Mike Seney, a task force member and senior vice president of operations for The State Chamber, a business and industry group that represents 1,500 employers statewide.  "I would rather do it right than rush into it."

***

Reader opinions are encouraged: email this writer, Lonce LaMon, at lonce@loncelamon.com.  How should California "do it right" if at all?  Let me know your thoughts....