Friday, October 16, 2009

Justices seem skeptical of

state’s

position in $110M JUA case

by Michael KitchCONCORD

—

The state’s claim to

$110-

million in “surplus”

funds accumulated bythe New Hampshire Medical MalpracticeJoint Underwriting Association (JUA)came under close questioning from the justices when its appeal of a

lower court’s

decision denying it the money was heard bythe New Hampshire Supreme Courtyesterday.Governor John Lynch and the leaders of the House and Senate are counting on$110-million of the $142.3-million in assetsaccumulated by the JUA to help fill budgetgaps. However, about a third of the 900policyholders of the JUA

—

includingLRGHeathcare, which pays more than $1-million in annual premiums

—

challengedthe

state’s claim to the money, insisting that

the rules governing the JUA and the termsof their insurance contracts required itsboard of directors to distribute any declaredsurplus to the policyholders, much like amutual insurance company would do. Theyclaimed that House Bill 2, the companionto the budget, represents impairs theircontractual rights in violation of the stateand federal constitutions. In July, JusticeKathleen McGuire of the Belknap CountySuperior Court ruled that the state had noright to the funds and, while upholding theclaim of the policyholders, did not order theJUA to distribute any money to them.As Attorney David Leslie, representingthe state,

challenged the policyholders’

right to a share of the funds Chief JusticeJohn Broderick interrupted.Referring to the rule of the JUA that

reads “if premiums

“exceed the amount

necessary to pay losses

and expenses,” then“the board shall . . . distribute

such excessto those health care providers covered by

the association,” he remarked “it saysshall.”

Leslie replied that because the decisionto order a d

istribution rests with the JUA’s

directors, the language does not amount to

a right, but merely “an