Bill would let SIIS sell more insurance

Friday, June 26, 1998 | 9:46 a.m.

The Legislature's Committee on Workers' Compensation voted 4-2 to prepare a bill expanding policies marketed by the state-run workers' compensation agency.

For more than 80 years, SIIS only has provided workers' compensation coverage for Nevada workers.

A law that takes effect in July 1999 will allow private insurance companies to sell workers' compensation policies, a practice common in other states.

To compete against the giant insurance companies that offer all types of insurance, SIIS general counsel Lenard Ormsby said his system must have the same option.

"We don't want to be limited," Ormsby told the committee on Wednesday.

Assemblyman Lynn Hettrick, R-Gardnerville, said the state shouldn't be liable for any losses that the insurance system could incur from the sale of new lines of insurance.

Hettrick added it's crucial that the state system sell new lines or face the loss of most of its workers' compensation business.

Hettrick said the private companies will try to get more of the workers' compensation market by offering Nevada companies good deals on auto, fire and other types of insurances.

"It will be an obvious marketing scheme," Hettrick said. "They will go to the employer and offer a package of insurance paid by one bill."

SIIS chief Douglas Dirks said state-run workers' compensation agencies in other states also sell auto, health and other policies.

"It is a service to the policyholders," he said. "Our policyholders need multiple lines."

During the committee hearing, veteran business lobbyists Robert Ostrovsky and Scott Craigie urged legislators not to allow the state system to sell new types of insurance.

Ostrovsky said the new lines could create a financial burden for Nevada. Craigie, who represents Liberty Mutual, said it is too soon to allow the state to embark on a new insurance venture.

Craigie pointed out that the insurance system's annual premium income, now $470 million, could drop to $100 million in the competitive era.

To assist the agency in moving toward competition, the legislative committee voted unanimously to draft a bill that would exempt SIIS from the state personnel act. That would give the agency the authority to dismiss workers at will.