Competitive State Fund
What Does Competitive State Fund Mean?
A competitive state fund is a state agency that competes with private insurance companies to provide workers’ compensation within the same state. Typically, this fund is state-operated and state-owned, offering employers an alternative option for workers’ compensation insurance.
Insuranceopedia Explains Competitive State Fund
The primary reason a competitive state fund is offered is to benefit employers, providing them with additional options and helping control rising workers’ compensation insurance costs, especially during business crises.
Workers’ compensation can be provided by either the state or a private insurance company. When a state fund does not allow private competition, it is referred to as a monopolistic state fund.
People who are denied policies by private insurers often turn to a state fund. This is common for those working in high-risk professions or industries, such as trucking.
