In a recent opinion by the Supreme Judicial Court, the central issue was whether the Massachusetts Insurers Insolvency Fund (Fund) could recover for costs paid on behalf of a high-net-worth insured employer. The court found in favor of the Fund, noting policy considerations as well as the notion that the benefits had been paid “on behalf of” the Bank. In their analysis, the court looked at the relationship created between the Fund and the employer, stating that the insurer acts under a contract to satisfy the legal obligation of the employer.
The facts of this case indicated that a bank employee suffered injuries while lifting coin-filled bags. She sought and received workers’ compensation benefits, first under section 34 for temporary total incapacity benefits and then section 35 benefits for partial incapacity. After her entitlement to section 35 benefits was exhausted, she sought permanent and total disability compensation. The Fund agreed to pay her future medical costs from the injury, as well as a lump sum payment of $85,000. They then sought to recoup payments from the Bank.