FORT COLLINS - An attorney for Pinnacol Assurance, Colorado's largest workers' compensation provider, said Friday that seven bills proposed by an interim committee of the Colorado Assembly are a threat to the company's ability to effectively provide workers' compensation services to businesses in the state.

Daniel O'Neil, general counsel and vice president of claims for Pinnacol, told a group of about 65 business people and others that the bills -- all offered by Democrats serving on the interim committee appointed by the Legislature -- collectively imperil Pinnacol's future success.

"We don't think legislators should get involved in a business that frankly they don't know a lot about," O'Neil said at the BBB/Pinnacol Workers' Compensation Safety Xpo 2009 event held at the Fort Collins Hilton.

The proposed bills, which must still get approval from the Legislative Council before they can be presented for action in January, cover a wide range of possible new regulations for Pinnacol. One from Rep. Su Ryden of Arapahoe County, for example, calls for Pinnacol to return a dividend to policyholders if its surplus exceeds 800 percent of its risk-based capital.

O'Neil said that would be bad for Pinnacol. "By putting this limitation on us it limits our ability to be effective in the marketplace," he said. "It is just really an arbitrary number."

Another proposed bill offered by Rep. Joe Miklosi of Denver would change the makeup of Pinnacol's board of directors, requiring two employee members to be non-management employees and two other members to be an injured worker and the executive director of the state's Department of Labor and Employment or his or her representative.

O'Neil said Pinnacol believes it now has the right board membership and it doesn't need changed. "Right now we think it's working very well," he said.

Other proposed bills would limit Pinnacol's ability to conduct surveillance activities in cases where fraud is suspected; increase the fine for insurers or employers violating workers' compensation laws from $500 to up to $1,000; and prohibit financial incentives from being given to anyone for denying or delaying a workers' compensation claim.

"We don't do that," O'Neil said. "It just doesn't occur."

O'Neil said Pinnacol has not yet taken a formal stance on any of the proposed bills but would soon, adding that he expects most if not all of the bills to go on to the Legislature for action.

Meantime, Pinnacol has created the Pinnacol Assurance Legislative Action Network, a web-based effort to keep employers informed of legislation movement and quickly contact state lawmakers to make their views known.

The 16-member interim committee included Democratic and Republican lawmakers, Pinnacol representatives, the commissioner of insurance and others, and met six times during the summer to study Pinnacol, a "political subdivision" of the state.

Last spring, lawmakers considered using Pinnacol's $500 million-plus surplus to help balance the state's budget but ultimately backed away from doing so. Instead, the legislature set up the interim committee to study how the 58,000-member, semi-private company works and what improvements it might need to perform better.