SAN FRANCISCO, Nov. 9, 2010 /PRNewswire/ -- State Fund announced today a 5.2 percent overall rate increase for 2011 and a revised broker of record policy. The rate filing also includes changes that will better serve employers in California's workers' compensation insurance market.
We recognize these are difficult economic times for California business owners. This rate increase reflects only the inflation to claims costs. While focused on maintaining rate adequacy, we will also take another step in spreading underwriting credit to more appropriately price all businesses and provide new opportunities for savings and better pricing for the best risks.
Specifically this rate filing expands the merit rating range for accounts $25,000 and above in premium to -/+ 40% to improve our ability to price businesses and to compete for those with excellent performance.
State Fund policyholders will also have more flexibility to choose how their workers' compensation policy will be serviced. We will recognize broker of record letters for our direct accounts and pay commission for those accounts in accordance with our 2011 Broker Agreement.
Recognizing brokers bring value to their clients through a variety of services, our 2011 Broker Agreement also increases the types of accounts for which brokers can receive commission.
Policyholders who pay more than minimum premiums, who do not have or cannot get broker representation and insure with State Fund directly, will receive a 3 percent credit on their policy.
The new rates apply to new and renewal workers' compensation policies with an effective date on or after January 1, 2011.
Tom Rowe, President and CEO of State Fund, said, "We consulted with industry groups and brokerages, including IBA West and the Alliance of Insurance Agents and Brokers, and appreciate their support and advice as we worked through these strategies. Our mission is to provide an open and stable market for California employers and brokers. Our goal is to listen to our customers and provide as much flexibility as possible in our products and services, reflecting the diversity of California's businesses. We know the past several years have been very hard on this state. We believe these changes will make us a stronger partner for California businesses."
EDITOR'S NOTE: Established in 1914 by the state legislature, State Fund is California's largest provider of workers' compensation insurance and a vital asset to California businesses. Completely self supporting, State Fund plays a stabilizing role in California's economy by maintaining an open door policy that ensures that all employers have a strong and stable option for their workers' compensation needs.
SOURCE State Fund