Utah: Legislature closes door on effort to create insurance subsidiary

Insurers are breathing a bit easier now that the Utah legislative session has ended, apparently without passage of a controversial measure. S.B. 64 would have allowed the Workers Compensation Fund of Utah to establish a subsidiary company to write commercial property and casualty lines of insurance in Utah.

The issue is that the fund is a market of last resort for workers' comp and therefore is entitled to a federal tax exemption on its profits. The subsidiary, therefore, would have initially had capitol flowing into it from the tax-exempt fund.

Insurers said that would put the new subsidiary on an unlevel playing field with competing private insurers. Among the opponents was the Property Casualty Insurers Association of America.

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"The difficult part is that [WCF] is a PCI member," said Kenton Brine, PCI's assistant vice president for the northwest region. "It was a challenge to oppose it but we have a policy position. We support legislation and regulation that fosters a healthy, competitive insurance market."

Utah's legislative session ended in mid-March.

Read more at the WorkersComp Forum homepage.

March 21, 2011

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