HANOVER INS. v. WORKERS' COMPENSATION
5/16/1997
[ 1] The Workers' Compensation Board appeals from a decision of the Superior Court (Kennebec County, Atwood, J.), vacating a Board assessment against Hanover Insurance Co. for the 1995 fiscal year. P.L. 1993, ch. 619 (effective April 7, 1994) (codified as 39-A M.R.S.A. § 154 (Supp. 1994)), repealed and replaced by P.L. 1995, ch. 59, § 1. The Board contends that the Superior Court lacked subject matter jurisdiction to review the Board's assessment pursuant to the Maine Administrative Procedure Act, 5 M.R.S.A. § 11001(1) (1989). Since Hanover failed to file a timely petition for appellate
[ 2] The Board's funding is provided through assessments levied against self-insured employers and insurance companies, who pass the assessment through to their insured employers. 39-A M.R.S.A. § 154 (Supp. 1996). The assessment is based on the insurers' and self-insured employers' pro rata share of the total premium volume for all
[ 3] Hanover and three other large insurance carriers filed petitions for reconsideration with the Board challenging the assessment. The insurers contended that section 154 did not permit the Board to levy a specific dollar assessment against insurers, but required the Board to calculate a percentage rate assessment that insurers could apply against their insureds based on the premium volume for the current year. The Board denied the petitions and the insurers paid the assessment without appealing the decision. The Legislature amended the statute, however, in 1994. P.L. 1993, ch. 619. The legislative purpose for the amendment is stated in the emergency preamble:
Whereas, the Legislature intended that the assessment be a
direct pass through to state employers such that insurers would
suffer no financial loss as a result of the assessment; and
Whereas, the implementation of the assessment by the . . .
Board has caused
Emergency Preamble, P.L. 1993, ch. 619.
[ 4] On May 2, 1994, the Board, now operating pursuant to the amended statute, sent notices of assessment to Hanover, stating that Hanover must pay $391,624 for the 1995 fiscal year. The Board arrived at this specific dollar amount by first calculating a percentage applicable to all insurers (1.4%) and then applying that percentage to Hanover's total premiums less dividends for the prior calendar year. Again, the large insurers disputed the assessment determination, contending that the Board should have assessed a percentage rate that the insurers could then apply to the premiums actually received in the 1995 fiscal year. Representatives of the Board met with four large insurance companies, including Hanover, several times over the course of the year to resolve the dispute. According to the Board, it decided to "agree to disagree" on the interpretation of the amended statute and to wait and see if the insurers' calculation method would bring in enough funds to meet the Board's $5.75 million budget. Hanover's quarterly assessment payments, based on 1.4% of its actual premium volume, fell far short of the Board's budget goals. Although the Board sought quarterly assessments of $97,906, Hanover paid $17,308 in the first quarter and $52,339 in the second quarter. On February 10, 1995 the Board issued an order stating that Hanover owed $126,165 in arrearages from the shortfall in its first two quarterly payments, and stating that "Hanover is hereby ordered to pay the arrearage in full on or before April 30, 1995 at which time the third quarter installment is also due."
[ 5] Hanover filed a petition for judicial review with the Superior Court pursuant to the Maine Administrative Procedure Act,
5 M.R.S.A. § 11001(1). On June 3, 1996, the Superior
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