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BOISE, Idaho (AP) — More than 13,000 businesses as well as state and local governments have received a portion of $35 million following the settlement of a class-action lawsuit.
The entities recently received the money after the Idaho Insurance Fund settled the lawsuit that focused on dividends, the Idaho Statesman reported (http://bit.ly/1L1O4Do).
The fund paid dividends to policyholders on a prorated basis, but plaintiffs said state law required the fund to pay equal dividends to policyholders. The fund provides workers compensation insurance.
"This will have absolutely no effect on the long-term viability of the fund," said George Parham, the fund's chief legal counsel, noting the fund had $678 million in assets last year.
Most public entities in the state pay premiums to the state-run Idaho Insurance Fund, and many private businesses use it as well. Dividends are paid to policyholders when the fund has a surplus. The fund prorates dividends by paying more to policyholders with fewer claims and payouts during the previous three years.
CDA Dairy Queen of Coeur d'Alene and Discovery Care Centre of Salmon sued, arguing the fund should pay equal dividends to all policyholders. It was turned into a class-action lawsuit that included those with policies between July 1, 2002, and May 5, 2009.
Gov. C.L. "Butch" Otter in 2009 signed emergency legislation to allow the fund to continue to prorate dividends.
Settling the lawsuit, Parham said, meant the fund avoided a possible $60 million judgment being sought by the plaintiffs.
After the settlement, the West Ada School District received more than $600,000 that district spokesman Eric Exline said was deposited into the district's general fund. He said he couldn't remember the district receiving unexpected money before.
"Certainly not in a quantity like that," he said.
The Idaho Department of Health and Welfare received nearly $780,000 from the settlement that's been deposited in the department's general fund. The city of Meridian received $48,197.
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Information from: Idaho Statesman, http://www.idahostatesman.com
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