Montana State Fund policyholders sue state of Montana

Submitted by Montana State Fund Justice
The Montana State Fund Justice Coalition, representing Montana State Fund (MSF) policy-holders and injured work-ers, has filed suit against the State of Montana for breach of contract and violation of the U.S. and Montana Constitution.

Senate Bill 4 was pro-posed by Governor Steve Bullock and passed during the November 2017 spe-cial session of the Mon-tana Legislature. The bill imposes a “management fee” on MSF assets, result-ing in the taking of $30 million from policyhold-ers and injured workers. The lawsuit challenges Montana’s taking of $30 million of MSF monies for purposes other than worker’s compensation and is asking the court to declare the statute “authorizing” this taking of private assets unconsti-tutional.
The coalition is led by business owner and state representative Greg Hertz (R-Polson).

“This money is collect-ed as insurance payments from policyholders to be used for the benefit of injured workers. These funds are private assets and it is unconstitutional for the government to disguise this taking as a “fee” and use the money for purposes that are not related to worker’s com-pensation,” said Hertz.
MSF policyholder and former MSF board mem-ber, Wayne Dykstra, is a plaintiff in the lawsuit.

“When there are ex-cess dollars in the State Fund, they have, by law, been returned to policy-holders to reduce premi-ums and the cost of doing business in Montana. This is an outright seizure of private assets that would set a precedent and put our workers compensa-tion system in jeop-ardy,” said Dykstra.

MSF was set up as a public corporation that competes with private insurance companies and gives employers a guaran-teed market to purchase workers compensation insurance. By law, MDF assets are held in trust both for injured workers and employers and are not to be used for any oth-er purposes. The Montana Chamber of Commerce, Montana Roofing Contrac-tors, Montana Building Industry Association, Na-tional Federation of Inde-pendent Business, Mon-tana Motor Carriers Asso-ciation, Professional In-surance Agents, the Inde-pendent Insurance Agents Association, and other employer groups oppose the legislation.

More than 30 Montana businesses and associa-tions have contributed to help fund the lawsuit. For more information, contact Greg Hertz, at 406-253-9505.