The New Hampshire Supreme Court on Thursday put a dent in the state budget by rejecting the state's claim to $110 million in surplus from a fund that underwrites medical malpractice insurance.
In a 3-2 decision, the court upheld policyholders' claim they had a constitutionally protected contractual right to the money. The court said the state could not change its law to apply retrospectively to contracts with policyholders.
"I applaud the Supreme Court for making the right decision," said House Republican Leader Sherman Packard of Londonderry. "I am not surprised that they affirmed the fact that state government shouldn't be raiding private accounts to balance out of control budgets."
An elated Kevin Fitzgerald, the policyholders' lawyer, said the next step will be determining if money should be distributed to policyholders as dividends or held in reserve.
The state said the surplus is from premiums, investment income, efficient operations and good claims management. It said the surplus also grew partly because the association did not pay state taxes or assessments charged private companies to cover the state Insurance Department's operating costs.
Associated Press Writer Kathy McCormack contributed to this report from Concord, N.H.
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