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Montana State Fund — State to Take Money from Reserves

Posted By Administration, Tuesday, December 5, 2017

Senate Bill 4 passed in the recent special session of the Montana Legislature. It has dire implications for Montana’s workers’ compensation quasi-private company the Montana State Fund.

Upon learning of the implications of Senate Bill 4, PIA Montana President Travis Clark went into action. He sent out an alert to PIA Montana members and said, “In special session earlier this year the Montana Legislature passed a bill that will now allow the state to charge the Montana State Fund (MSF) a 3% management fee for all money in the fund above $1 billion. The 3% fee will be transferred to Montana’s fire suppression account.”

In the member alert he noted the MSF board of directors had filed a lawsuit in Judge Mike McMahon’s District Court contending the law is unconstitutional. After the suit was filed Governor Steve Bullock changed the make-up of the board.

When the Montana State Fund board of directors met last Wednesday afternoon they — by a 5-2 vote — decided to withdraw the lawsuit. That decision means the state will now be allowed to charge the Montana State Fund (MSF) the 3% management fee.

The Professional Independent Insurance Agents of Montana (PIA) is disappointed in the board’s decision to withdraw its legal challenge. Your association believes the board should litigate the matter. It is critical to protect all finances of the fund from being used by the state of Montana for anything other than work comp costs.

During the hearing, the MSF board’s attorney eloquently argued that point to the board. He said the money in the state fund belongs to the policyholder and that all excess money in the fund — by law — has to be returned to the policyholder in the form of lower workers’ compensation rates or dividends.

“PIA agrees and does not believe Montana law allows the funds to be used in this matter. That law was put into place to protect policyholders who are — by the way — informed and assured in their workers’ compensation contracts that all premiums paid are to stay in the fund for the purpose of paying work comp claims,” Travis Clark said.

The PIA will continue to work behind the scenes to see if a resolution can be found. You can help. We urge you to contact members of the House and Senate in your district and to contact the governor’s office to share your concerns. Perhaps in the next session of the Legislature a better solution can be found.

In the meantime, you can continue to put pressure on the MSF board of directors.

 

Chair Lance Zanto — 406-444-5689 — lzanto2@mt.gov

Lynda Moss — 406-690-2644 — lyndamoss@mac.com 

Jan VanRiper – jvr406@gmail.com

Matt Mohr — 406-570-8523 — matthewcmohr@hotmail.com

Jack Owens — 406-541-1506 — jack@stewartmt.com

Jim Molloy — 406-949-0340 — jim@galliklawfirm.com

Cliff Larsen — 406-544-6263 — cliff@larsenusa.com

Tags:  Insurance Content  Insurance Industry  Insurance News  Montana State Fund — State to Take Money from Rese  Weekly Industry News 

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