State Compensation Insurance Fund
Encyclopedia
The State Compensation Insurance Fund (State Fund) is a workers' compensation
insurer that was created as a "public enterprise fund" by the U.S. state
of California
, and today has partial autonomy from the rest of the state government
. It is required by state law to maintain its headquarters
in San Francisco
, but has regional offices all over the state.
State Fund was created by the Boynton Act of 1913, and it started operations in 1914. Around that same time, the voters amended the California Constitution
by initiative to guarantee the constitutionality
of the state workers' compensation system. State Fund's constitutional basis is found at Article 14, Section 4 of the state constitution:
State Fund has over $22 billion in assets and employs approximately 7,500 people (the number varies based on State Fund's current percentage of the market) of whom over 500 are attorneys. Historically it has insured an average of 23 percent of the market each year since its creation by the Legislature in 1914. Its market share spiked to over 50 percent in years 2002-2004 when a large number of private carriers left the market. In keeping with its mission, State Fund has an open door policy writing insurance for California businesses who need workers' compensation insurance. State Fund insures approximately one in five businesses in California. State Fund also serves as a third party administrator adjusting claims
for almost all of the state agencies.
California is one of 21 states with a competitive state fund in the workers' compensation insurance market. Several state funds serve as insurers of last resort
and act as an example for private companies. Nevertheless, to keep them from crowding out private companies, they operate as non-profits and return surplus money to policy
-holders after paying off claims and operating costs. Most write only workers' compensation insurance and only in their home state.
As part of a continuing cost-cutting and restructuring plan State Fund announced on October 6, 2011 plans to layoff approximately 1,800 employees, about a fourth of its workforce. .
Workers' compensation
Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence...
insurer that was created as a "public enterprise fund" by the U.S. state
U.S. state
A U.S. state is any one of the 50 federated states of the United States of America that share sovereignty with the federal government. Because of this shared sovereignty, an American is a citizen both of the federal entity and of his or her state of domicile. Four states use the official title of...
of California
California
California is a state located on the West Coast of the United States. It is by far the most populous U.S. state, and the third-largest by land area...
, and today has partial autonomy from the rest of the state government
Government of California
The government of California operates in the context of a democratic republic with three branches of government: the executive branch consisting of the Governor of California and the other elected constitutional officers; the legislative branch consisting of the California State Legislature which...
. It is required by state law to maintain its headquarters
Headquarters
Headquarters denotes the location where most, if not all, of the important functions of an organization are coordinated. In the United States, the corporate headquarters represents the entity at the center or the top of a corporation taking full responsibility managing all business activities...
in San Francisco
San Francisco, California
San Francisco , officially the City and County of San Francisco, is the financial, cultural, and transportation center of the San Francisco Bay Area, a region of 7.15 million people which includes San Jose and Oakland...
, but has regional offices all over the state.
State Fund was created by the Boynton Act of 1913, and it started operations in 1914. Around that same time, the voters amended the California Constitution
California Constitution
The document that establishes and describes the duties, powers, structure and function of the government of the U.S. state of California. The original constitution, adopted in November 1849 in advance of California attaining U.S. statehood in 1850, was superseded by the current constitution, which...
by initiative to guarantee the constitutionality
Constitutionality
Constitutionality is the condition of acting in accordance with an applicable constitution. Acts that are not in accordance with the rules laid down in the constitution are deemed to be ultra vires.-See also:*ultra vires*Company law*Constitutional law...
of the state workers' compensation system. State Fund's constitutional basis is found at Article 14, Section 4 of the state constitution:
State Fund has over $22 billion in assets and employs approximately 7,500 people (the number varies based on State Fund's current percentage of the market) of whom over 500 are attorneys. Historically it has insured an average of 23 percent of the market each year since its creation by the Legislature in 1914. Its market share spiked to over 50 percent in years 2002-2004 when a large number of private carriers left the market. In keeping with its mission, State Fund has an open door policy writing insurance for California businesses who need workers' compensation insurance. State Fund insures approximately one in five businesses in California. State Fund also serves as a third party administrator adjusting claims
Claims adjuster
Claims adjusters investigate insurance claims by interviewing the claimant and witnesses, consulting police and hospital records, and inspecting property damage to determine the extent of the company’s liability. In the United Kingdom, Ireland, Australia, South Africa, the Caribbean and New Zealand...
for almost all of the state agencies.
California is one of 21 states with a competitive state fund in the workers' compensation insurance market. Several state funds serve as insurers of last resort
Last Resort
-Music:*"Last Resort" , a song by Papa Roach from their 2000 album Infest*"Last Resort", a song by Katatonia on the album Discouraged Ones*The Last Resort , a 2006 album by the Danish electronic musician Trentemøller...
and act as an example for private companies. Nevertheless, to keep them from crowding out private companies, they operate as non-profits and return surplus money to policy
Insurance contract
In insurance, the insurance policy is a contract between the insurer and the insured, known as the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for payment, known as the premium, the insurer pays for damages to the insured which are caused by...
-holders after paying off claims and operating costs. Most write only workers' compensation insurance and only in their home state.
As part of a continuing cost-cutting and restructuring plan State Fund announced on October 6, 2011 plans to layoff approximately 1,800 employees, about a fourth of its workforce. .