Mutual Company – Pinnacol Wants To Be One
Pinnacol becoming a mutual company generates a litany of tax questions. One of my devout blog readers has asked why would Pinnacol offer so much $ for its autonomy. I did leave that part out of my last few posts Pinnacol.
Pinnacol wishes to become a mutual company. They want to have a board of directors that is not beholding to the state of Colorado. In my opinion, the request for the change is due to their book value. Pinnacol’s value is very likely much more than the $330 million that was offered to the state.
As I said in my last post, Pinnacol would have to pay taxes if they become a mutual company. I am not sure they have stressed that enough with the state government. I have not seen a high level of concern that the switch would cause employers in Colorado to pay more premium. This concern was shown when CompSource Oklahoma was considering the same issue. The bottom line is Pinnacol will become a mutual insurer. The question is when and how much will they pay Colorado.
A Mutual insurance company is an insurance company that has no shareholders but instead is owned entirely by its policyholders.
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