Workers Comp Fund sues state

The Workers Compensation Fund of Utah has sued the state that created it, asking a 3rd District Court to decide who "owns" the fund's $800 million in assets.

The fund filed suit Monday, asking the courts to decide if its policyholders or the state of Utah owns the fund.

It is an issue that has occupied Utah's public policymakers for the past 18 months, setting up a battle that has implications in surrounding states and for the future financial vitality of the fund. It will also determine whether high-risk workers ultimately get insured.

"We are really in a box," said Lane Summerhays, the fund's president. "Given the options available to us, there's no choice."

The decision to sue came after a unanimous vote by the fund's board of directors, which includes Camille Anthony, executive director of the Utah Department of Administrative Services.

Anthony, although appointed to her state position by Gov. Mike Leavitt, serves on the board of Workers Compensation by statute — something that can't be touched by the governor.

But the vote is nothing Anthony regrets, even if it is awkward.

"I was one of the board members that felt if we hit a certain point in discussions, I believed there was value in seeking clarity to an issue that a disinterested third party may be able to provide some direction," she said.

Anthony's vote goes directly against the public policy position put forward by Leavitt, who believes the fund is in state control and should remain that way to serve the high-risk market.

The fund wants to sever its ties to the state so it can continue to do business in Idaho. That state has issued a Nov. 1 deadline for the fund to stop writing business there through its for-profit subsidiary, Advantage, unless Utah government relinquishes its control of the fund.

Sen. Curtis Bramble, R-Provo, ran legislation in the 2003 session to have Leavitt give up the state's connection to Advantage through his appointment powers to the board of directors. But the bill ultimately failed, in part because the governor said more time was needed to study the issue.

The sticking point is the "value" of the fund should the state decide to give up control and what happens to high-risk workers.