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Don't dismantle SAIF Corp.


The workers' compensation insurer benefits employers and the state

SAIF Corp., a public corporation providing workers' compensation insurance to Oregon employers, has been under attack in recent months for some of its expenditures for lobbying and consulting. While some of the criticism may have merit, we're concerned that overreacting could seriously damage the company and wind up harming Oregon businesses ' especially small businesses.

The Legislature converted the State Accident Insurance Fund from a state agency to a public corporation in 1980 to allow it to compete with private insurers. By the mid-1980s, the corporation was teetering on the edge of bankruptcy.

Reforms instituted during the administration of then-Gov. Neil Goldschmidt turned the company around, increasing productivity and reducing workplace accidents.

The company had a 21 percent share of the market and 1,200 employees in 1990. Today, its market share is over 41 percent and it employs 830.

Today, SAIF insures 53 percent of the 82,000 Oregon employers that must carry workers' compensation policies. SAIF-insured companies employ 31 percent of the state's estimated 1.7 million workers.

The percentage of workers covered is smaller than the proportion of employers because SAIF insures a large number of small businesses.

— Liberty Northwest, a private insurer competing with SAIF, has tried for years to get lawmakers to dismantle SAIF, to restrict its operations or to make it part of state government again. Those efforts have largely failed, but last year a Liberty supporter successfully sued to force SAIF to release thousands of documents under the state Public Records Act.

Private insurers such as Liberty Northwest, of course, are exempt from the disclosure law.

Some of the documents SAIF released indicated that the company had spent more on lobbying the Legislature than it had reported. The documents also showed that SAIF had paid Goldschmidt's consulting firm &

36;1 million over seven years for advice ' and for what Goldschmidt says was almost no lobbying. The company paid a separate lobbying firm about &

36;98,000 a year ' about the same amount Liberty Northwest reports paying for lobbying.

If SAIF paid more for lobbying than it disclosed to the Legislature, that needs to be remedied. But let's make sure the treatment doesn't kill the patient.

Liberty Northwest and its parent company, Liberty Mutual of Boston, would like nothing more than to see lawmakers dismantle a very efficient competitor.

If that happens, the big losers will be Oregon's small employers. They have a good deal with SAIF, which charges lower rates than the top private insurers. If they were forced to seek coverage elsewhere, they would pay more. That would be bad for them, bad for Oregon's business climate and bad for the state in general.

Legislators and the public should see Liberty Northwest for what it is ' a wolf in sheep's clothing. Under the guise of privatization, it is attacking an agency that has done an admirable job of keeping workers' compensation rates low. Trading that record for the promises of a Boston-based, for-profit insurance company makes no sense.