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Governor asks Legislature to study future of Utah workers' compensation fund; Deloitte, NCCI retained for analysis
Summary
The governor briefed the House on options for the state workers' compensation fund, introduced Deloitte & Touche and NCCI representatives, and said a full report will be delivered June 18. He said the fund has a notional book value near $300 million and controls roughly 53–58% of the Utah market; members discussed litigation risk, ownership questions and funding for due diligence.
The governor told the House the state has retained Deloitte & Touche, the National Council on Compensation Insurance (NCCI) and outside counsel to analyze options for the state workers' compensation fund and to prepare a report for lawmakers. The briefing framed a range of possible outcomes including keeping the fund as a state agency, bringing it closer to state government, demutualizing or converting it into a stock company, or selling it and distributing proceeds to appropriate parties.
The governor underscored the complexity and potential size of the transaction and described the fund as having a notional or book value “somewhere in the neighborhood of $300,000,000,” noting it affects roughly 53–58% of the workers’ compensation market in Utah. He said preserving a market of last resort — a means for employers to obtain coverage when the private market is unavailable — is central to lawmakers’ deliberations: “The hinge decision is the market of last resort,” the governor said.
Consultants on the dais introduced themselves. Rod Morris, an actuary, said he is based in Los Angeles and focuses on workers’ compensation; Rick Burt described himself as a principal of Deloitte & Touche and head of the West Sector Actuarial and Insurance consulting practice. Maggie Karpak (NCCI state relations executive) and Jim Now (general manager of residual markets for NCCI) said NCCI manages residual markets in 20 states and will advise on options for managing a market of last resort.
Members pressed the governor about stakeholder engagement, litigation risk and costs. The governor said many political subdivisions are policyholders and the state itself contributes nearly $7,000,000 annually in premium. He noted litigation challenging state-controlled funds is underway in Idaho and being contested in California and referenced Senate Bill 170, which would have provided roughly $50,000,000 in one possible resolution to ownership questions but might not provide complete certainty against future suits.
On funding the review, the governor said the legislature appropriated $190,000 for counsel and legal work and that other examination and investment-banking costs may be covered by premium assessments or paid from the fund. He estimated the investment-banking work might amount to a few hundred thousand dollars but said the due diligence costs are justified by the size of the potential transaction and its long-term implications.
Timing and next steps: the governor said a comprehensive summary of options, policy considerations and ranges of financial impact will be provided on June 18; lawmakers discussed a possible special session in August to act on matters that require prompt attention. The House moved to hear the consultants in Committee of the Whole, then dissolved that committee after the briefing and authorized a committee to notify the Senate to adjourn until June 18.
