From Deseret News archives:
Fund fight back in court
At issue is whether state or companies control the money
Oral arguments are scheduled for Tuesday to debate whether the WCF, which was created by the state, is now considered a "quasi-public corporation" whose funds are owned by the numerous companies who use them or if the funds are controlled by the state.
At issue is whether a district court judge erred when he ruled that state had no ownership of WCF funds, but rather the funds were owned by the some 30,000 policyholders, most of which are Utah businesses.
The issue has several significant trade associations backing WCF's position, saying they do not trust the state to keep their hands off the insurance fund during tough budget times.
The Utah Manufacturers, Utah Food Industry and Utah Trucking associations have filed a joint friend of the court brief with the Supreme Court to state their concerns that an insurance fund under control of the state would prove too tempting for state officials.
"The State of Utah has shown in lean economic times a propensity to unilaterally attempt to redefine ownership of the Trust Fund," wrote attorney James Black on behalf of the trade associations. "Each time, the effort has been directed toward taking Trust Fund assets to supplement other government agency budgetary shortfalls or to in some other way assert authority and power over the Trust Fund's insurance business operations. Each time the Court has rebuffed the raid."
The fund was created by the state in 1917 as an option for local employers, who were being required to obtain insurance for their employees.
"We believe it's clear the Workers Compensation Fund was created back in 1917 to operate as an insurance business," said Dennis Lloyd, senior vice president and general counsel for the WCF.
Lloyd said the state started WCF with $40,000 in seed money as an option for employers. "In 1917 there was some distrust of insurance companies, generally referring to them as being 'east of the Hudson,' " Lloyd said.
By 1922, WCF paid back the state the $40,000 start-up funds and has since stood on its own financially. In 1988, the Legislature gave WCF more independence from the state, giving it "quasi-public entity" status. They also made WCF a "carrier of last resort," meaning if no other private insurance company would offer an employer insurance, WCF would take them.
