The court on Friday unanimously upheld most of the findings by the state's Bureau of Securities Regulation Review last year that LGC violated state law by accruing huge surpluses rather than returning them to the political subdivisions that buy health and other insurance through LGC.
LGC's lead lawyer did not immediately return a call seeking comment.
The LGC prevailed on one point: The court ruled that a hearing officer exceeded his authority when he told LGC net assets should not exceed 15 percent of claims.
Lawyers for LGC argued the order interferes with LGC's discretion to manage funds efficiently. But the justices said state law does not grant risk pool managers "unfettered discretion" to manage and accrue risk pool funds.
LGC has managed risk pools since 1987. Its HealthTrust pool insures 70,000 public employees and handles $360 million in claims each year, according to court documents. It covers 26,000 employees under its Workers Compensation division.
Until several years ago, risk pools were largely exempt from state regulation.