dissenting.
I dissent as to the holding that the Special Fund is an arm or alter ego of the Commonwealth of Kentucky. The Special Fund’s status is such that it would not destroy diversity jurisdiction if allowed to intervene in this case. Therefore. I would affirm the district court’s order allowing the Special Fund to intervene. Because diversity exists, however. I agree that the district court’s order remanding the case should be reversed.
This court has applied various factors to determine whether an entity is the arm or alter ego of the state for diversity purposes. In Geeslin v. Merriman, 527 F.2d 452, 453-56 (6th Cir.1975), this court considered the following factors in determining whether a plaintiff entity was an arm or alter ego of the state: (1) whether the entity is distinct from the state with the power to sue and be sued and (2) whether the money recovered by the entity will be paid to the treasury of the state. In Hall v. Medical College of Ohio, 742 F.2d 299, 302 (6th Cir.1984), this court considered nine factors in determining whether a defendant entity was an arm or alter ego of the state for Eleventh Amendment purposes,2 including whether state law treats the entity as an arm of the state, whether the payment of any judgment will come from the state treasury, whether the entity is performing a governmental or proprietary function, and whether the entity has the power to sue and be sued. This court has also acknowledged, however, that the “most important” factor is whether the state treasury will be liable for any judgment or will receive the benefit of any judgment that the entity receives. Id.; see Brotherton v. Cleveland, 173 F.3d 552, 560-61 (6th Cir.1999); Geeslin, 527 F.2d at 455.
Here, four factors clearly indicate that the Special Fund is a political subdivision rather than an arm or alter ego of the Commonwealth of Kentucky.
First, monies recovered by the Special Fund are not paid to the Kentucky treasury. The Special Fund (now called the Division of Workers’ Compensation Funds) *725is an agency created by Kentucky law responsible for the administration and legal representation of the fund and the maintenance of records regarding the payment of claims by the fund. Ky.Rev.Stat. § 342.120(1). The Kentucky Workers’ Compensation Funding Commission is a funding arm that controls, invests, and manages the fund. Id. § 342.1223(1). It is “attached to the Labor Cabinet for administrative purposes only.” Id. §§ 342.1223(5), 336.015. The fund receives funding from an assessment imposed on workers’ compensation premiums and an appropriation of Kentucky coal severance tax revenues. Id. § 342.122(l)(b)-(c).
By statute, the Funding Commission shall “[h]old, administer, invest, and reinvest [the fund] separate and apart from all ‘state funds’ or ‘public funds.’ ” Id. § 342.1223(2)(a). Hence, any judgment in favor of the Special Fund in this case would not be paid into the Kentucky treasury; rather, the monies recovered would be kept separate from Kentucky’s General Fund. See Thompson v. Kentucky Reinsurance Assoc., 710 S.W.2d 854, 857 (Ky. 1986) (“the premiums assessed by the [Kentucky Reinsurance Association, the predecessor of the Funding Commission,] against its subscribers are clearly private funds, as opposed to public, and are therefore not subject to control by the General Assembly”); cf. Bremiller v. Cleveland Psychiatric Inst., 879 F.Supp. 782, 786-87 (N.D.Ohio 1995) (holding that a state psychiatric institute was an arm of the state for Eleventh Amendment purposes because money received by the institute was paid directly to, and controlled by, the state treasury). Indeed, loans and transfers from the Funding Commission to the Commonwealth are expressly prohibited. Ky.Rev.Stat. § 342.1227. Because the Kentucky treasury will not be affected by any recovery or lack of recovery by the Special Fund in this case, the Special Fund is a financially independent political subdivision rather than an arm or alter ego of the Commonwealth.
Second, the Special Fund is a distinct legal entity with the power to sue and be sued. While the Funding Commission manages the fund, the Special Fund provides legal representation, maintains records, and oversees the liabilities of the fund. It is created by Kentucky law and attached to the Department of Workplace Standards for administrative purposes. Id. §§ 342.120(1), 336.020. If an employee receives benefits from the Special Fund but then recovers from a third party, the Special Fund (not the Kentucky Attorney General) may by civil action recover at least a portion of the amount it originally paid. Id. § 342.700(1). The Funding Commission also has the power to sue. Id. § 342.1223(3)(a). In this case, the Special Fund sought reimbursement by intervention in plaintiffs’ lawsuit. Clearly, it has the capacity to pursue its subrogation claims in court.
Third, the Special Fund engages in proprietary functions not government functions. The Special Fund is designed to encourage the hiring of disabled workers by limiting employer liability and spreading the risk associated with hiring disabled workers. Beale v. Faultless Hardware, 837 S.W.2d 893, 897 (Ky.1992); A & K Coal Co. v. Blankenship, 708 S.W.2d 638, 639 (Ky.1986). These are certainly governmental objectives in a broad sense, but whether an entity serves broad public goals or purposes is not the relevant question to determine whether it is independent from the state. Certainly every state-created entity will serve some public purpose. Otherwise, the state would not have created it. Instead, the court must examine what the entity is actually doing and determine if that function is a governmental function or a proprietary function. *726See Hall, 742 F.2d at 305. Here, the Special Fund provides its own legal representation for subrogation claims, manages the monies in the fund, and provides supplemental insurance. See Ky.Rev.Stat. § 342.120(1). When examined individually, the provision of legal services, money management, and insurance are more properly categorized as classic proprietary functions.
Fourth, no Kentucky court has found the Special Fund to be an arm or alter ego of the Commonwealth. In Wagoner v. Cansler, 542 S.W.2d 291, 291 (Ky.1976), the Special Fund appealed the grant of workers’ compensation benefits to a group of claimants; the appeal was denied. The claimants moved for imposition of a statutory penalty and the Special Fund denied liability arguing that it was an “instrumentality of the Commonwealth of Kentucky” exempt from the penalty provisions due to sovereign immunity. Id. The Kentucky Supreme Court held that “[w]ith this argument the trial court did not agree, and neither do we,” and ordered the Special Fund to pay the penalty. Id. Contrary to the majority’s reading of the case, the Kentucky Supreme Court did not regard the Special Fund as an arm of the Commonwealth entitled to sovereign immunity. Moreover, the Special Fund has been an intervening plaintiff in numerous federal cases, none of which questioned the court’s diversity jurisdiction. See, e.g., Brock v. Caterpillar, Inc., 94 F.3d 220, 222 (6th Cir.1996); Bowling v. General Motors Corp., 70 F.3d 1271, No. 94-6061, 1995 WL 704230, at *1 (6th Cir. Nov. 29, 1995) (unpublished).
Balancing the numerous factors from prior cases, including the connection between the Special Fund and the Kentucky treasury as well as the Special Fund’s autonomous power, clearly the Special Fund is a political subdivision not an arm or alter ego of the Commonwealth. Therefore, the district court erred in finding that the Special Fund was not a “citizen” under 28 U.S.C. § 1332. The Special Fund should have been allowed to intervene and the case should continue in the district court with the Special Fund as a party.
. Other courts have applied the Eleventh Amendment alter ego analysis to diversity situations. See Tradigrain, Inc. v. Mississippi State Port Authority, 701 F.2d 1131, 1132 (5th Cir.l 983) (stating that the two analyses are “virtually identical”). But see University of Tennessee v. United States Fidelity & Guaranty Co., 670 F.Supp. 1379, 1386 (E.D.Tenn.1987).