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IS S.A.I.F. SAFE FOR OREGON?

 

 

By Ron Lee

Posted 12:53 AM Eastern
June 26, 2004

NewsWithViews.com


Signers of Oregon Priorities Act Petition Say NO.

SALEM, OR - Citizens for a Sound Economy (CSE) among other groups have sent out petitions in favor of the Oregon Priorities Act. The Act dissolves the state-run insurance business known as SAIF Corporation and frees up the excess surplus above and beyond the needed money for claims reserves, which CSE claims to be an estimated one-half billion dollars, to be used toward education, prescription assistance for elderly and disenfranchised, local law enforcement and workforce training programs.

SAIF has been under fire for several years culminating in an ethics complaint filed by State Sen. Vicki Walker, D-Eugene, in December of 2003. Sen. Walker also called for a state audit of SAIF's spending, a re-evaluation of the Governor appointed board members, and legislation to convert SAIF Corporation back into a regular state agency. This complaint spurred Governor Theodore Kulongoski to write a letter of inquiry on December 11, 2003 to SAIF Corporation's Board of Directors asking them to answer, at minimum, ten questions regarding their policies and plans for the future. The official response to the Governor came on April 22, 2004.

With new allegations that SAIF has been withholding documents sought via public records requests from February of 2002 to March of 2004 there has been a hearing ordered by the court for July 2, 2004 to look into the matter and the petitions for the Oregon Priorities Act have been circulated. Citizens for a Sound Economy has stated in their letter that accompanied the petition that, "In SAIF, Oregon has created a huge state-owned business that is accountable to no one, is reducing competition, and is serving neither the taxpayers nor the small business it was designed to serve." Calls to clarify this position with Russ Walker, Oregon Director of CSE, have gone unreturned.

According to the state, the Oregon Department of Consumer & Business Services Insurance Division exists to oversee insurance companies and make sure they comply with the law and this includes SAIF. "We regulate SAIF as an insurance company ... look at rates and financial status." Steven Corson, Public Information Officer for the division, stated. But in the last published review of SAIF by the division it states, "The provisions of ORS 731.028 exempt the Company from many of the Insurance Code requirements. SAIF is not subject to several of the provisions which limit insurer investments, such as the limitations ordinarily imposed on investments in mortgage loans (ORS 733.600), real property (ORS 733.610), stocks of corporations (ORS 733.620), stocks or obligations of subsidiaries (ORS 733.630), data processing systems (ORS 733.660), noninvestment grade securities (733.695), and many other such items. SAIF is exempt from the 'prudent investor' and prohibited investments standards." These exemptions are what set it apart from other insurance companies and is why companies like Liberty Northwest are in active support of the Oregon Priorities Act and why many members of the public, like Lorraine Tillman, have signed the petition and feel like, "The State has no business being in the insurance business, especially if they aren't going to be held accountable."

Supporters of SAIF claim that the Oregon Priorities Act is a way for insurance companies, especially Liberty Northwest, to oust the main competition and profit on SAIF's loss. They contend that dissolving SAIF will not open a competitive market to drive premiums down and help small businesses nor will it keep taxes from being raised by distributing the excess monies into already established state-funded programs.

When it comes to an estimated one-half billion dollar surplus, the debate will continue but for Steven Corson, "It's a matter for the voters."

SAIF Corporation Web Site and Oregon Department of Consumer & Business Services Insurance Division

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With new allegations that SAIF has been withholding documents sought via public records requests from February of 2002 to March of 2004 there has been a hearing ordered by the court for July 2, 2004 to look into the matter and the petitions for the Oregon Priorities Act have been circulated.