The government-controlled State Compensation Insurance Fund announced it has filed a new rating plan with the California Department of Insurance. The plan adopts the Workers’ Compensation Insurance Rating Bureau’s rate adjustments for new and renewed policies effective Dec. 1, 2011, but holds the line on its overall rate level, State Fund said.
California’s largest provider of workers’ compensation insurance also announced it will increase the group discount for policies insured through the California Farm Bureau Federation, the state’s largest farm organization, from the current level of 6 to 20 percent effective Jan. 1, 2012.
Although manual rates will increase for some classifications, other changes to State Fund’s rate filing, including the increase in group discount available to qualifying Farm Bureau accounts, will result in an overall decrease in collectible premium of roughly 1 percent, State Fund said.
In October, State Fund announced to its employees in a memo a restructuring to be implemented in 2012 that will result in a reduction in force that will eliminate between 1,500 and 1,800 positions.
The restructuring is expected to save the State Fund $200 million a year. The layoffs, which equate to roughly 25 percent of the workforce, are expected to be effective in the second quarter of next year.
The decision apparently follows a detailed review of San Francisco-based State Fund’s business, including comparing State Fund to other state funds and specialty companies that write workers’ compensation in California.
State Fund spends more operating the company than it does paying benefits to injured workers, according to the organization.
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