Senate debates privatizing industrial insurance

Jennifer Coleman

Friday, April 30, 1999 | 9:15 a.m.

CARSON CITY - Senate Democrats foiled a vote Thursday on Gov. Kenny Guinn's worker compensation bill, saying they hadn't seen a critical amendment until the day before.

The minority Democrats invoked a Senate rule to ensure that a vote couldn't be taken until the next day. Bill Raggio, the Republican majority leader, retaliated by scheduling a vote early Friday - a half hour after midnight.

Senate Commerce and Labor Chairman Randolph Townsend, R-Reno, tried to push SB37 through the Senate as an emergency measure. But Raggio said the Democrats "decided to play games and hold up the bill."

Senate Minority Leader Dina Titus, D-Las Vegas, was one of several senators who questioned the plan to privatize the state-run Employers Insurance Company of Nevada.

"Are we turning the fate of injured workers over to a company we have no control over?" she asked, adding that the managers of the current system have a poor management record. The state system nearly collapsed in the early 1990s.

Townsend assured his colleagues that the new company, like any private company, would become part of the Nevada Insurance Guaranty Association, which covers policies if the insurer becomes insolvent.

While there was no final Senate vote Thursday, the upper house did vote 11-8 along party lines to adopt the amendment that triggered the Democrat's stalling tactics.

Raggio, Sen. Mark James, R-Las Vegas, and Sen. Maurice Washington, R-Reno, got legal advice that they could vote on the bill despite their business relationships as attorneys or insurance brokers.

Sen. Jon Porter, R-Boulder City, a district manager for an insurance company, abstained from voting, as he has on nine other bills regarding insurance. A legal opinion he had requested said he could vote on the bill, but Porter said it wouldn't be appropriate for him to vote.

"However I strongly believe that simply because something in not illegal doesn't make it right," Porter said.

Sen. Bob Coffin, D-Las Vegas, also declined to vote because of a conflict. He then asked several questions about the bill during the floor session.

The state will open up the workers' compensation market to competition from private companies on July 1.

At stake is premium income totaling $440 million a year. The state's share has amounted to $385 million in premiums from 46,000 employers. The rest goes to self-insured programs.

Because EICON will be competing with other firms for the first time in its 86-year history, the company is expected to lose 50 percent to 65 percent of its business. Up to 600 employees could be laid off. And those who remain with the company would lose civil service protections.

SB37 proposes to buy out workers who want to retire early, set aside $2 million for retraining, give priority to laid-off EICON employees seeking other state jobs and allow agencies under a hiring freeze to employ the former EICON workers. The bill also gives employees the right to be placed on a priority list for other state positions for three years.