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The Saif issue is not complicated

Don't dismantle a company that serves its clients well and keeps rates down

If you're confused about the television advertising and direct-mail campaign calling for the state of Oregon to dismantle Saif Corp., it's really pretty simple.

The bottom line, in our view, is this: Oregon businesses now enjoy some of the lowest workers' compensation costs in the country. Only 12 states have lower rates, and many of those pay far less in benefits to injured workers. If the initiative petition now being circulated makes the ballot and passes, that situation is no longer likely to be true.

Liberty Northwest, a private company offering workers' compensation insurance to Oregon employers, wants Saif, a public corporation owned by the state, out of the way. Now they've been joined by Citizens for a Sound Economy, the anti-tax outfit that worked for the defeat of Measure 30 earlier this year.

A great deal of criticism has been leveled at Saif, even before the July 2 deadline for submitting signatures. Liberty Northwest has spent a great deal of money to deliver that criticism.

A great deal of that criticism is misleading at best, flat wrong at worst.

The initiative petition now being circulated suggests that the excess surpluses retained by Saif could be used to pay for schools, medication for the elderly and the poor and other wonderful things. Sounds good, if you believe that the surpluses are really excessive.

— In fact, insurance companies are required to maintain reserves sufficient to cover the claims of injured workers and their families ' in some cases for the worker's entire lifetime. In Saif's case, that requirement is substantial. And the size of its reserves is reviewed quarterly by auditors inside and outside the company and state government.

By law, Saif and every other workers' compensation insurer also must maintain a surplus of money to protect itself, its policyholders and injured workers from unexpected losses. If that surplus drops too low, the state Insurance Commissioner can order the company to increase it.

If the surplus gets too large, Saif returns the money to policyholders in the form of dividends ' effectively reducing its rates. Since 1990, the company has returned &

36;750 million in dividends.

Saif uses no tax money. It is supported by the premiums paid by its clients.

Saif is not squandering money. In fact, since 1997, Saif has reduced its own workforce from 1,000 to 820, while the number of employers it insures has grown 4 percent each year. Its top executive was paid less than &

36;300,000 last year, while Liberty Northwest's CEO pulled down nearly &


Finally, if Saif were a badly run company that didn't serve its customers well, one would expect those customers ' Oregon businesses ' would turn to other insurers or call for Saif's demolition.

Instead, Saif's clients ' and injured workers who file claims ' give it consistently high ratings for service. The National Federation of Independent Business, which represents small-business owners, strongly supports the company and its continued existence.

Liberty Northwest already charges higher premiums than Saif in every category. If the out-of-state insurance giant were able to eliminate its chief competition, which way do you think its rates would go?

Saif is a business, being run in an efficient, reponsible manner. Its reserves are not the solution to Oregon's budget problem. And Liberty Northwest is not the solution to resolving workers' compensation issues.