N.H. Supreme Court: State Can’t Take Malpractice Reserves

January 28, 2010

New Hampshire’s highest court has ruled that state lawmakers cannot raid $110 million in reserves from the Joint Underwriting Association, which underwrites medical malpractice insurance in the state.

The Supreme Court decision, released this morning, upholds a lower-court decision that the move by Gov. John Lynch and lawmakers to take the money from the reserves of the Joint Underwriting Association (JUA) was a violation of contract laws in the state.

Lynch, a democrat, had planned to use the money to balance the budget over the next two years – a move criticized by republicans in the state.

Lawyers for the JUA argued that the move violated the state constitution.

The JUA was created in 1975 as a tax-exempt underwriter for medical malpractice insurance in the state. It has since grown to become a significant insurer of doctors and health care facilities in the Granite State.

It has a $152 million surplus, though it has only issued $1 million dividends to policyholders in the last 35 years.

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