Legislators question if Nevada is ready for big insurance changes
Tuesday, Feb. 23, 1999 | 5:24 a.m.
CARSON CITY -- Lawmakers asked on Tuesday whether budget limits by Gov. Kenny Guinn will allow for a smooth dismantling of Nevada's worker compensation insurance monopoly.
The state's system - now called Employers Insurance Company of Nevada - has controlled such coverage for more than 80 years, although some big companies can self-insure because they have the assets to cover large payouts.
But a law taking effect in July mandates a "three-way" system that'll also allow private insurers to sell policies covering on-the-job injuries.
Nevada Insurance Division officials told a joint budget hearing they aren't sure what exactly will happen when the state makes the transition - and so they're not sure what staffing resources they'll need to oversee the entire industry.
"When you were (planning) three-way, I know you requested seven positions and received one. Do you have what you need to do with just one person?" asked Assemblywoman Chris Giunchigliani, D-Las Vegas.
Insurance Commissioner Alice Molasky-Arman said in an earlier hearing she had "doubts and fears" about the budget for her office. She also said three-way will mean a big increase in rate hearings and in employers' appeals from rate hikes.
But on Tuesday she backed off from the earlier concern about the adequacy of her budget, reduced by Guinn from her initial $7.2 million request to $5.7 million.
She explained that part of the problem in gauging agency needs is that no other states have changed to three-way in over 30 years, and there's no current model to use in designing a spending plan.
Molasky-Arman added that her division will be able to request more employees or other resources from the Legislature if that's needed later on.
"It's really tough, but I'm not totally satisfied. I'm really concerned that there aren't going to be enough positions," Assemblywoman Vonne Chowning, D-North Las Vegas, the budget subcommittee chairwoman, said later.
Molasky-Arman "has been around a while and has a very credible reputation. I don't think she would be trying to fill positions that weren't needed," she added.
The state now insures about 46,000 employees. Private insurers who enter the Nevada market after the July deadline will compete for $440 million a year in premiums now paid into the state system.
"We have to go back to the drawing board and it will all get filled out at the end of all this mess," Chowning said.
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