SCIF Files Rating Plan Revision

California's state workers' compensation insurer, State Compensation Insurance Fund, said it filed a revision to its rating plan that will result in a 3.5 percent reduction in premium effective July 1.

The insurer said that while its base rates will remain unchanged, it has expanded its merit rating and claims-free discount plans to lower rates for policies with superior safety records. The new rate filing will affect new and renewal workers' comp policies with an effective date on or after July 1.

State Fund said that as it expands its “claims-free” credit, some small employers with superior safety records would see their claims-free discount increase from 10 percent to 13- or 15 percent. Additionally, for the first time new business accounts to State Fund may also qualify for a claims-free credit based on experience with their prior carrier.

“Promoting safe workplaces is a vital part of State Fund's mission, and small business is the backbone of California's economy,” said State Fund President and Chief Executive Officer Janet Frank. “We feel it is critical to pass on savings that recognize employers for maintaining safe workplaces.”

In addition, State Fund is enlarging the range of accounts that qualify for its expanded merit rating plan, allowing its underwriters greater discretion in pricing accounts generating more than $100,000 in premium. State Fund's underwriters will be able to base more of the pricing decision on each individual account's experience, providing the opportunity for deeper discounts on accounts with excellent safety records.

Ms. Frank noted that the latest filing brings the cumulative decrease to 57 percent below pre-2004 reform levels.

State Fund said it has approximately 200,000 policyholders ranging from small businesses to large group associations. It was created by the California Legislature in 1914 as a nonprofit, self-supporting, fairly competitive public enterprise that guarantees a permanent workers' comp insurance marketplace in the state.