The Utah Attorney General's Office has argued that WCF is still a state-created entity and that its assets are not owned by its policyholders. Deputy Attorney General Thom Roberts said the state has no interest in taking the injury fund from policyholders, but added the state believes it has a right to control and manage WCF and the injury fund.

Yet the Utah Supreme Court has ruled in the past that it was illegal for the Legislature to touch insurance fund dollars. Lloyd said the high court has ruled at least three times that WCF has some distance from the state.

Utah, like many states, requires employers to have insurance for their employees in case they are injured on the job. In Utah, the state allowed employers to seek private insurance coverage with the option to be insured by WCF. Other states like Nevada originally created a monopolistic system that did not allow competition with the state-created fund. Ultimately, Nevada's fund was also privatized.

Lloyd said times are different than in 1917. "The economy in 2005 is much more different than what it was," he said, adding many insurers compete with his organization. However, WCF must still be there for companies who can't find insurance.

WCF has been criticized for being "carrier of last resort," which grants it exemption from federal income tax. In defense, Lloyd said that if they take the burden of high-risk policies, the exempt status compensates.

Assuming the Supreme Court sustains the district court ruling and declares WCF independent from the state, Lloyd said WCF will continue to operate as a quasi-public corporation, which gives them no special privileges.

One certainty is that many Utah companies will be watching this case very closely. "We hope that the Supreme Court's ruling in the case will be definitive and provide the answers to these questions," Lloyd said.

---

E-mail: gfattah@desnews.com