The Montana Supreme Court upheld a $250,000 fine, with $150,000 suspended, against Victory Insurance Company for mishandling workers’ compensation policy transfers in 2019. The case stemmed from Victory’s agreement to sell its workers’ compensation business to Clear Spring Property and Casualty Company. Victory notified policyholders via a single email on December 31, 2019, stating their policies would be “upgraded” to Clear Spring policies effective January 1, 2020, without clearly explaining that the policies were being terminated and rewritten. The Montana Commissioner of Securities & Insurance (CSI) found this constituted 165 illegal cancellations under Montana law (§§ 33-15-1103, -1105, MCA), which prohibits canceling policies before their term ends without proper notice and misrepresenting policy terms (§ 33-18-202, MCA).
Victory argued the transfers were assignments, not cancellations, and claimed due process violations and a right to a jury trial. The court rejected these arguments, ruling that the transfer eliminated policyholders’ rights to choose their insurer, a key aspect of Montana’s competitive insurance market. The court affirmed the CSI’s authority to impose fines without a jury trial, as no material factual disputes existed. The ruling, issued August 12, 2025, emphasizes the need for clear, timely communication with policyholders during business transfers to avoid regulatory penalties.