Despite legislative threats, CompSource survives session unscathed by Janice Francis-Smith The Journal Record May 28, 2008 OKLAHOMA CITY – State leaders made a number of ominous statements at the beginning of the 2008 legislative session concerning the state-created workers’ compensation insurer, CompSource. But when the Legislature adjourned Friday, none of those proposals or pronouncements had become law. CompSource is a nonprofit, self-supporting workers’ compensation insurance company created by the state to ensure Oklahoma business owners will always be able to obtain coverage for their employees. During economic hard times, when private insurers are reluctant to write coverage for high-risk employers, CompSource will take on those otherwise uninsurable employers, earning the agency the moniker of “insurer of last resort.” CompSource does not receive state money, but operates on investment income and customer premiums. The size of CompSource’s book of business is heavily reliant on market conditions. During hard economic times, more of the market share flows to CompSource. When economic times are good and private insurers are willing to take on more risk, CompSource loses policies to the private sector. Lawmakers have often proposed the quasi-state agency be privatized, but usually such proposals are scrapped when leaders are unable to guarantee that otherwise uninsurable business owners would be able to obtain coverage. In January, then-Speaker of the House Lance Cargill, R-Harrah, questioned whether the state should be in the insurance business at a press conference focusing on his efforts to streamline government. Cargill recommended the Legislature review any “non-core or non-performing state-owned assets” that may be sold off to a private-sector business, including CompSource and the state-owned Grand River Dam Authority power company. Less than a week later, Cargill resigned as speaker amid an ethics investigation and the revelation that he had repeatedly paid his personal income and property taxes late. The state House of Representatives quickly elected state Rep. Chris Benge, R-Tulsa, as speaker before the session began Feb. 4. But little was mentioned after that time regarding CompSource. Gov. Brad Henry, in the executive budget he presented to the Legislature on the first day of session, proposed several revenue-generating ideas to compensate for the $260 million gap between the amount spent in his budget and the amount lawmakers were expected to have available for expenditure. One of Henry’s proposals was to impose a 2.25-percent premium tax on CompSource, expected to generate an additional $7.5 million for the Legislature to spend. Currently, CompSource is exempt from taxation to compensate for the fact that, unlike a private insurer, the company cannot turn away high-risk employers. Henry claimed the added cost could be paid out of increased revenue yielded by new financial and administrative policies. But Henry’s proposal to impose a tax on CompSource failed to gain traction during the 2008 session. CompSource President Terry McCullar said the session was pretty quiet for CompSource officials, though the company was delighted to see the passage of House Bill 1959 by state Rep. Ron Peterson, R-Broken Arrow, which was signed by the governor on April 28. The new law gives CompSource the authority to provide insurance coverage for employees who work out of state for an Oklahoma-based company. Reprinted by CompSource Oklahoma with permission from the Journal Record