State Fund Clamps Down on New Business

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, April 9, 2003 Share this on FacebookTweet thisEmail this to a friend

Faced with inadequate reserves, the State Compensation Insurance Fund (SCIF) issued an announcement to California's insurance agents and brokers informing them of new measures to be implemented April 1, 2003. SCIF will no longer accept applications from businesses that already have workers' compensation coverage through another insurer. SCIF also issued more stringent underwriting standards for agents and brokers submitting new business. Included in the new underwriting guidelines is a requirement that, with the submittal of new business, agents and brokers must provide three proofs of declination from other private insurers offering workers' compensation coverage in California.

The business community should be concerned with this announcement because it could put additional strain on the insurance companies that are writing workers' compensation policies in California. Insurance companies could be overly burdened by having to provide declinations for classifications that they do not write simply so that the business can be placed with SCIF. As a result, businesses can expect to see yet another increase in their workers' compensation premiums and businesses wanting a SCIF policy will find it much more difficult to obtain coverage.
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