Pinnacol Assurance must pay a civil penalty of $80,000 and credit certain policyholders a minimum of $15 million after the state Division of Insurance found the company was essentially gouging some customers.The penalty and credit are part of a settlement between Pinnacol and the Division of Insurance. The settlement comes on the heels of a state-ordered audit completed earlier this year.According to a release from the Division of Insurance, "Details uncovered in the audit identified the use of rating factors which were not filed with the Division of Insurance as required by law. Findings in the audit raised concerns that Pinnacols practices could result in excessive, inadequate, or unfairly discriminatory rates."Because Pinnacol is the workers compensation insurer of last resort in Colorado, employers who are Pinnacol policyholders often accept the rates without question or complaint," said Commissioner of Insurance Marcy Morrison.Under the settlement agreement, Pinnacol agreed to credit certain policyholders $15 million against premiums to be paid in 2011. According to the Division of Insurance, the credit will only apply to policyholders who are "scheduled-rate."A scheduled rating is a tool that workers compensation carriers can use to adjust premiums, either up or down, explained the release.The DOI statement said the civil penalty of $80,000 represented $10,000 per year for violations where the company used unfiled schedule rating factors to set premiums for some policyholders.Per the settlement, Pinnacol will cease to use two rate filing factors which the DOI asserted were violations of Colorado law.Pinnacol Assurance told 7NEWS, The terms of the agreement were approved by the Pinnacol Board of Directors and include maintaining "the minimum premium threshold it currently uses to qualify policyholders for schedule rating."Also, effective January 1, 2011, "Pinnacol will make adjustments to some of the factors it uses to price policies and correct a 2002 non-filing that was identified in the recent audit."Pinnacol also agrees to the $15 million credit and told 7NEWS, the credits will be based on a pro-rated size of the policyholder's premium.Finally, Pinnacol has agreed to pay the $80,000 to the Division of Insurance for its filing error.