The State Compensation Insurance Fund (State Fund) is a
workers' compensation
Workers' compensation or workers' comp 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 emp ...
insurer
Insurance is a means of protection from financial loss in which, in exchange for a fee, a party agrees to compensate another party in the event of a certain loss, damage, or injury. It is a form of risk management, primarily used to protect ...
that was created as a "
public enterprise fund" by the
U.S. state
In the United States, a state is a constituent political entity, of which there are 50. Bound together in a political union, each state holds governmental jurisdiction over a separate and defined geographic territory where it shares its so ...
of
California
California () is a U.S. state, state in the Western United States that lies on the West Coast of the United States, Pacific Coast. It borders Oregon to the north, Nevada and Arizona to the east, and shares Mexico–United States border, an ...
, and today has partial autonomy from the rest of the
state government
A state government is the government that controls a subdivision of a country in a federal form of government, which shares political power with the federal or national government. A state government may have some level of political autonom ...
. It is required by state law to maintain its
headquarters
Headquarters (often referred to as HQ) notes the location where most or all of the important functions of an organization are coordinated. The term is used in a wide variety of situations, including private sector corporations, non-profits, mil ...
in
San Francisco
San Francisco, officially the City and County of San Francisco, is a commercial, Financial District, San Francisco, financial, and Culture of San Francisco, cultural center of Northern California. With a population of 827,526 residents as of ...
, 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
The Constitution of California () is the primary organizing law for the U.S. state of California, describing the duties, powers, structures and functions of the government of California. California's constitution was drafted in both English ...
by initiative to strengthen the
constitutionality
In constitutional law, constitutionality is said to be the condition of acting in accordance with an applicable constitution; "Webster On Line" the status of a law, a procedure, or an act's accordance with the laws or set forth in the applic ...
of the state workers' compensation system. This was necessary because American employers during the early 20th century often challenged mandatory workers' compensation statutes as an unconstitutional invasion of
freedom of contract, an argument which had strong persuasive force during the
Lochner era
The ''Lochner'' era was a period in American legal history from 1897 to 1937 in which the Supreme Court of the United States is said to have made it a common practice "to strike down economic regulations adopted by a State based on the Court's o ...
. Since 1976, State Fund's constitutional basis has been found in Article 14, Section 4 of the state constitution:
In May 2014, State Fund reported 2013 assets of approximately $20
billion
Billion is a word for a large number, and it has two distinct definitions:
* 1,000,000,000, i.e. one thousand million, or (ten to the ninth power), as defined on the short scale. This is now the most common sense of the word in all varieties of ...
and a workforce of more than 4,000 people (the number varies based on State Fund's current percentage of the market). In 2013, State Fund’s market share was the largest in the state at nearly 11%. 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 that need workers' compensation insurance. State Fund insures approximately 130,000 policyholders 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.
In 2010, State Fund implemented a plan to redesign operations and reduce costs for California employers. In 2013, State Fund announced
that it reduced annual fixed expenses by $300 million. These savings will help State Fund maintain fair pricing and bring greater value to more California employers.
Notes
External links
* {{official website, http://www.statefundca.com
California Workers' Compensation Claims & Benefits @ WorkCompAcademy.comWhat Is the State Compensation Insurance Fund
Workers' compensation
Companies based in San Francisco