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State Funds

Explanation of state funds (operated by a state) that issue workers compensation policies, just like an insurance company.;

Employers must provide workers compensation benefits to injured employees by:

    • buying an insurance policy from an insurance company
    • buying insurance from a state fund
    • becoming an approved self-insurer

 

State funds are members of the American Association of State Compensation Insurance Funds (AASCIF). AASCIF publishes the "AASCIF FACT BOOK." The book contains a variety of information about the state compensation insurance funds of the United States and the Workers’ Compensation Boards and Commissions of Canada. For instance:

  • 30 workers compensation state funds in the United States
  • 4 monopolistic (exclusive) state funds
  • 20 competitive (non-exclusive) state funds
  • Largest fund is Ohio
  • Smallest fund is New Mexico
  • Not all state funds are the market of last resort (assigned risk)

Monopolistic State Funds (4)

A monopolistic fund is another statutorily established fund. In these states, it is the only source of workers compensation insurance coverage available. In a state with a monopolistic state fund, an employer needing workers compensation insurance may only obtain the coverage from this fund. The only alternative available to employers is to become approved by the state regulatory agency to self-insure their exposure. Monopolistic fund states include North Dakota, Ohio, Washington, and Wyoming. Monopolistic state funds face the same limitations many competitive state funds face in that they are not able to offer additional coverages such as the extension of coverage into other states due to jurisdictional limitations.

 

 

Competitive
with Private Insurers  

Exclusive
Arizona* Maine Oklahoma North Dakota
California Maryland Oregon Ohio
Colorado Minnesota Pennsylvania Washington
Hawaii Missouri Rhode Island Wyoming**
Idaho Montana Texas  
Kentucky New Mexico Utah  
Louisiana New York    

 

*Scheduled to be privatized by 2013.
**Compulsory for extra hazardous operations only. Employers with nonhazardous operations may insure with the state fund or opt to go without coverage.

Source: III website as of 09/21/11

Note: Nevada and West Virginia were monopolistic fund states. Nevada allowed private insurance carriers to compete for business effective July 1, 1999 and West Virginia effective July 1, 2008.

 

State

Fund Contact

North Dakota

Workforce Safety and Insurance (WSI)

Ohio

Ohio Bureau of Workers’ Compensation (BWC)

Puerto Rico

The State Insurance Fund Corporation of Puerto Rico

Washington

Department of Labor and Industries (L&I)

Wyoming

 

Workers' Safety and Compensation Division, Department of Employment

 

Competitive State Funds (23)

Many jurisdictions have created competitive funds to vie with commercial insurers for workers compensation business in their markets. Fourteen of the competitive state funds serve as the market of last resort for their state. Basically, that means that they cannot refuse to provide coverage to any employer who is subject to the workers compensation act and not in default of a workers compensation premium obligation. 

 

Due to the competitive nature of the mechanism, a competitive state fund can sometimes provide less expensive coverage than that offered by a voluntary carrier. One limitation of a competitive state fund is that many are not able to offer additional coverages such as the extension of coverage into other states due to jurisdictional limitations.

 

State

Last Resort

Fund Name

Arizona

No

The Arizona State Compensation Fund

California

Yes

The State Compensation Fund of California

Colorado

Yes

Pinnacol Assurance

Hawaii

Yes

Hawaii Employers’ Mutual Insurance Company, Inc. (HEM1C)

Idaho

No

The Idaho State Insurance Fund

Kentucky

Yes

Kentucky Employers’ Mutual Insurance (KEMI)

Louisiana

Yes

Louisiana Workers’ Compensation Corporation (LWCC)

Maine

Yes

Maine Employers’ Mutual Insurance Company

Maryland

Yes

The Injured Workers’ Insurance Fund of Maryland (IWIF)

Minnesota

No

The Minnesota State Fund Mutual Insurance Company (SFM)

Missouri

No

Missouri Employers’ Mutual Insurance (MEM)

Montana

Yes

The Montana State Compensation Insurance Fund

Nevada

No

The Employers’ Insurance Company of Nevada

New Mexico

No

The New Mexico Mutual Casualty Company

New York

Yes

The New York State Insurance Fund

Oklahoma

Yes

CompSource Oklahoma

Oregon

No

SAIF Corporation

Pennsylvania

Yes

The Pennsylvania State Workers’ Insurance Fund (SWIF)

Rhode Island

Yes

The State Compensation Insurance Fund
a/k/a The Beacon Mutual Insurance Company

South Carolina

No

South Carolina State Accident Fund

Texas

Yes

Texas Mutual Insurance Company

Utah

Yes

The Workers’ Compensation Fund of Utah (WCF)

 

West Virginia

Yes

 Brickstreet Mutual Ins Co

 

Note: South Carolina, the State Accident Fund, per its website, covers state agencies, other government entities, and if required by the legislature, small businesses in the private sector

 



 

 



 

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The material in this document has been prepared and shared for informational purposes only and should not be relied upon as legal advice on any particular situation.