An insurer should have been entitled to reimbursement from the Massachusetts Workers’ Compensation Trust Fund even though it had stopped issuing new workers comp insurance policies in the state in 2003, the Massachusetts Appeals Court ruled Thursday.
In Arrowood Indemnity Co. v. Workers’ Compensation Trust Fund, the court vacated a decision by a review board that had found Arrowood was not entitled to reimbursement from the fund, which reimburses insurers for workers comp benefits paid to previously injured workers who suffer further work-related injuries.
Trust fund revenues come from assessments on employers that are collected by their insurers, and they are calculated based on collected insurance premiums.
In Arrowood, the court determined precedent on the issue is no longer relevant, since there is a difference between roles played by employers and those played by insurers with respect to trust fund reimbursement.
The court said when insurers enter a run-off period, and no longer issue new policies in the state but still collect premiums from existing policies, it is entitled to trust fund reimbursements.
The review board had come to the opposite conclusion.
The only exception to reimbursement is cases involving self-insurance groups who have chosen not to participate in the trust fund, not insurers who have stopped issuing policies, the court wrote.
The court said it rarely overturns precedent, but it found that past precedent afforded “too much deference” to the review boards decisions in similar cases.