Where to begin?
Sen. Eric Moore, R-Miles City, is seeking to eliminate the Montana State Fund, take its assets and replace it with a trust which would administer and pay for existing claims.
Why is he doing this when by his own admission he is still “learning the details?”
Proponents will blindly say it is the promotion of “competition” to improve the market but in reality it is much simpler - private greed. Victory Insurance is based in Miles City and has paid a pile of money this year to get its agenda in front of the legislature. The truth is that not all economic concepts work in all markets. In a state which requires the insurer of last resort, this is one.
What's to be believed?
Victory and other private insurers need this in order to compete with the Montana State Fund?
Or as, Victory's homepage proclaims, are 80% of employers already paying too much for workers' compensation?
That is the message that Victory has trumpeted on billboards, newspapers and television ads throughout the state of Montana. If that is true -- and it would be nice to see the actuarial foundation for the claim – then why have market forces not corrected the market?
Here's a guess. Victory wants to create a market abyss for which they are uniquely positioned to jump in and fill the void. Once accomplished, the value of the company has increased, it can be sold.
The idea that private carriers will flock to write business in Montana or volunteer to be the insurer of last resort is the stuff of fairy tales.
And what of injured workers? Very few private carriers outside of Victory or Liberty maintain and staff offices in Montana. That means that third party administrators would administer claims. The most prominent third party administrator is Sedgwick. That bodes poorly for injured workers because while Montana State Fund's adjusting practices will not always make injured workers happy, Sedgwick's fall woefully short of adequate. Mail is filtered through Kentucky, calls are ignored, disability payments are chronically late without explanation.
So who benefits from this bill? Victory Insurance. Sedgwick.
Not the employers. The employers already have the choice and according to Victory, 80% of employers should be already be racing to Victory for coverage. But for some reason, they are not. Victory has already sued the Montana State Fund for unfair trade practices and lost. Victory appealed to the Montana Supreme Court. And lost.
Not the injured worker. Private carriers care little about Montana's injured workers or effecting appropriate outcomes. MSF may not strike workers as the best but truth be told, MSF is the most reasonable insurer with respect to workers' compensation in Montana.
Victory has not achieved a market through pricing, service or litigation so it seeks to do so through political means. Sedgwick cares not one bit about Montana's injured workers or employers.