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Fri January 10, 2014
Supreme Court Says LGC Must Pay Out Millions
The state’s highest court has upheld a regulators’ order forcing the Local Government Center to pay cities and towns $33 million in overpayments and to refund $17 million it transferred from a health insurance pool to a workers comp pool.
The 22-page ruling agreed with a securities bureau order that the local government center, which pays out more than $350 million in claims per year, violated the state law requiring it to return surpluses --in this case $33 million --to the cities and towns and school districts it served.
But the unanimous ruling was not a total win for regulators.
The court sided with the LGC that a hearing officer lacked the authority to set future reserve limits at no more than 15 percent of claims.
Throughout this case LGC lawyers argued that the state was interfering with the efficient management of funds that has served customers well.
The court, however, wrote that state law does not give risk pools board of what it called "unfettered discretion" and "unregulated authority."