Workers’ comp plan to receive full hearing

Wednesday, April 7, 1999 | 12:16 p.m.

Guinn announced in his January state of the state address that he would try to privatize the Employers Insurance Company of Nevada, which writes workers' compensation coverage for thousands of businesses.

But Pete Ernaut, Guinn's chief of staff, said the privatization plan came in late as an amendment due to a wait for information onn ways to keep the system tax exempt when it's privatized.

The Senate Commerce and Labor Committee got the amendment on Monday. It'll be incorporated into SB37, a bill already in the committee dealing with industrial insurance issues.

Commerce Chairman Randolph Townsend, R-Reno, said the proposal will be exempted from Friday's deadline for action on bills so that a full hearing can be held. There was an initial presentation on the proposal Monday from Douglas Dirks, who heads Employers Insurance.

Without an exemption, the bill will fail, Townsend said.

"This is huge," he said. "This is major stuff that impacts every taxpayer in the state of Nevada, every injured worker in the state of Nevada.

"I'm not rushing this committee to do anything on that issue unless we get the time to fully review it, have hearings and let anyone who wants to testify on it come forward," Townsend said. "We will not rush to judgment."

Formerly called the State Industrial Insurance System, the system was drastically overhauled in prior legislative sessions to reduce red ink.

The debt existing in the current system would be sold to a reinsurance company, a special type of insurance company which would wipe the debt off the state's books. The payment to the reinsurance company would be invested by the company and used to pay off the state's liabilities.

Under current law, private insurance companies beginning July 1 will be allowed to provide coverage to companies for workers' compensation, competing for the first time with Employers Insurance.

But rather than have a state agency compete with private companies, Guinn wants to change Employers Insurance into a private company beginning Jan. 1.

As many as 600 state jobs could be lost in the switch, but Guinn has proposed buying retirement credit to allow workers to retire early, providing $2 million in retraining, and giving the employees top priority for hiring in other departments to lessen any effects from the change.