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HARRISBURG, Pa. (AP) – A Pennsylvania state budget that relies heavily on one-time cash infusions is facing a $200 million lawsuit in federal court.
The Pennsylvania Professional Liability Joint Underwriting Association sued last week and said the state’s attempt to take most of its reserves is an unconstitutional nationalization of a non-profit organization.
The association was created by the state in 1975 as a medical malpractice insurer of last resort. It provides coverage to more than 600 companies, and says its reserves were generated from premiums.
Budget-related legislation signed by Gov. Tom Wolf last month would shut down the association Dec. 1 if it doesn’t hand over $200 million.
Government lawyers say it created the association and can dissolve it. They also say the association’s reserves are excessive and don’t belong to it.
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