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Leadership from State Funds
Because of their unique position in the industry, state funds are
recognized nationally as workers' compensation leaders. They are
staffed with specialists whose in-depth knowledge and expertise
have produced many significant advances and innovations in the workers'
compensation field.
State fund employees concentrate their knowledge, research, and
abilities to a single line of insurance, which makes them leaders
in workers' compensation. Many state funds are required to license
their marketing representatives with state insurance departments.
A substantial number of Chartered Property and Casualty Underwriters
and Certified Safety Specialists are employed by state funds.
Pioneers
State funds have been pioneers in many areas, including rehabilitation
and effective delivery systems. The Canadian funds are often cited
for excellence and leadership in rehabilitation and treatment of
permanent partial disabilities. The Washington fund is a recognized
leader in the practice of the total rehabilitation concept.
State funds are totally involved with physical restoration, vocational
evaluation, counseling, and job placement services. Their efforts
return injured employees to the work force, keeping them as viable
earners and tax-paying citizens who are assets to their states.
Current technology is employed in adjusting and handling claims.
Many funds use sophisticated computer-based systems for maximum
efficiency and service to employers and in delivering benefits.
All funds have produced managerial innovations to aid their employers
within the criteria established by the laws of their jurisdictions.
These creative solutions to problems demonstrate the positive effect
of a carrier that specializes in workers' compensation.
All of the knowledge and information generated by state funds is
available to other funds. Their organization, known as the American
Association of State Compensation Insurance Funds meets to distribute
and share information, techniques, ideas, and knowledge. This collaboration
aids them in the perfection of their handling of problems in the
system.
Yardstick for measuring cost
State funds also serve as a yardstick for measuring the cost of
workers' compensation insurance against which other insurers' performance
can be measured. This factor played a significant role in the legislative
decisions to establish the newest funds in Missouri, Kentucky, and
Hawaii. State funds' history of a low expense ratio and control
of net premium cost for employers was a determining influence.
Existing state funds around the country serve as an available resource
for states seeking to have a positive effect on their economy and
offer solutions to workers' compensation problems. The eight state
funds created in the early 1990s quickly became the market leaders
in their respective states while effectively depopulating their
assigned risk pools of those small-premium-size employers that the
private sector was not willing to service.
State funds have traditionally set standards of performance for
reducing net premium costs through rate discounts and dividends.
Some state funds have further reduced costs through institution
of downward deviations from standard rates for premium by significant
amounts. Such low costs and service afforded by the nonprofit state
funds over the long haul have been and remain positive influences,
as well as directly delivering a good insurance value in their respective
jurisdictions.
States realize a benefit by having a state fund
Revenue generated by their funds through premium, benefits, salaries,
and operational expenses remain in the state. Fund investments can
also boost the state's economy. Some state funds invest reserves
in home and commercial mortgages, or in savings in time deposits
in state banks. Lower workers' compensation costs to employers is
a benefit to a state's economy.
State funds continue to fulfill the mission for which they were
created: to provide readily available workers' compensation insurance
and benefits to the employer and the worker at the lowest possible
cost, and to return the injured worker to full employment at the
earliest possible opportunity.
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