Article ID: 289d79948b7b01899578c4ce1e33d4685e43450ad3ac28092453b470a5fa2231
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URL: https://www.businessinsurance.com/high-court-backs-regulators-fine-in-comp-insurer-dispute/
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High court backs regulator’s fine in comp insurer dispute - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers High court backs regulator’s fine in comp insurer dispute by Louise Esola Agents and Brokers , Workers Comp Coverage May 13, 2026 The Montana Supreme Court has upheld a $75,000 fine against Victory Insurance Co., reinforcing state regulators’ authority to require insurers and managing general agents to produce records in a specific format during compliance investigations. In a unanimous decision Tuesday in Victory Insurance Co. v. State Auditor , the court sided with the Montana Commissioner of Securities and Insurance in a dispute over Victory’s role as MGA for Clear Spring Property and Casualty Co.’s workers compensation business in the state. At issue was whether Victory complied with Montana Insurance Code requirements that MGAs maintain separate business records and provide the commissioner access to “all books, bank accounts, and records … in a form usable to the commissioner.” After Clear Spring notified regulators in 2021 that Victory had refused to turn over MGA data following the termination of their agreement, the commissioner ordered Victory to produce all records related to its work for the insurer. Regulators specified that the data should be delivered in .csv files unless the records’ native format made that impractical. Victory instead sent large sets of PDF files and links to sample files on an FTP site, arguing that it did not use .csv formatting and that Clear Spring already possessed the requested documents. Regulators said that response failed to satisfy the statutory requirement and launched administrative proceedings. The commissioner also found that Victory’s contract with Clear Spring was missing provisions required under Montana’s MGA law, resulting in three Insurance Code violations: two contract violations and one records-production violation. A hearing examiner recommended summary judgment for the state and a $25,000 fine for each violation, which a special deputy insurance commissioner later adopted for a total penalty of $75,000. Victory argued on appeal that PDFs were still “usable” under the statute and that regulators should have been required to prove they could not use them. The Supreme Court rejected that interpretation, finding that the law gives the commissioner discretion to determine what constitutes a usable format. The ruling states that the statute requires records to be usable “to the commissioner,” not merely capable of use in some general sense. “The statute does not impose a burden on the Commissioner to prove that the records were incapable of use,” the court said, agreeing that insurers and MGAs must provide records in a format fit for regulatory review. Victory also challenged the size of the fine, arguing the applicable MGA statute authorized only a $5,000 penalty per violation. But the court said the commissioner could rely on broader Insurance Code authority allowing penalties of up to $25,000 per violation, making the higher fine lawful. The court upheld the maximum penalty, citing findings that Victory “went out of its way to frustrate the Commissioner’s investigation” by converting spreadsheet files into PDFs rather than providing native data files. Metadata showed the documents originated from Microsoft Excel spreadsheets, contradicting Victory’s claim that they were scanned from physical records. 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