Judge blocks Pennsylvania’s demand for $200M from insurer

A federal judge is temporarily blocking an effort by Pennsylvania’s cash-strapped state government to shut down a state-created medical malpractice insurer of last resort if it doesn’t hand over $200 million from its reserves.

U.S. District Judge Christopher Conner this week granted an injunction sought by the Pennsylvania Professional Liability Joint Underwriting Association.

Conner’s order suspends the Dec. 1 deadline to provide the cash until the association’s lawsuit can go to trial. State officials wanted the money to help resolve a massive deficit, but the association says the move is an unconstitutional nationalization of a non-profit organization.

It says its reserves were generated from premiums.

State government lawyers contend the state created the association and can dissolve it. They say the association’s reserves are excessive and don’t belong to it.