Utah Legislature Passes Bill to Allow State Workers’ Comp Fund to Operate in Other States

February 13, 2001

The Utah State Legislature has passed HB 59, allowing subsidiaries of the state workers’ compensation fund to sell insurance to employers outside Utah, in direct competition with private insurance companies.

If signed by the governor it will allow the Utah Workers’ Compensation Fund to sell in other states. “We opposed this bill throughout the legislative session because the state fund does not operate on a level playing field with private insurers,” said Ann Weber, National Association of Independent Insurers counsel. “Utah’s Workers Compensation Fund, like other such state funds, was created as a residual market to offer coverage to employers who could not get it from regular insurance companies on the open market,” said Nancy Schroeder, NAII assistant vice president, workers’ comp. “NAII member companies compete actively in the workers’ comp market, especially serving smaller employers,” Schroeder said.

“In our economic system, government entities should not compete with private businesses. Tax breaks enjoyed by state funds put private insurance companies at a distinct disadvantage.” HB 59, introduced by House Majority Leader Kevin S. Gard on January 15, moved quickly through the legislature.

It was passed by the House January 17 and by the Senate on February 5. Similarly, California’s State Compensation Insurance Fund was chartered as a competitive market, but it does not offer coverage outside of the state.

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