State Fund Reports Increased Surplus, Income From Premiums
State Compensation Insurance Fund, California's semi-public workers' compensation "insurer of last resort," on Wednesday reported that its surplus increased by 37% to $2.86 billion in 2004, the San Francisco Chronicle reports (Abate, San Francisco Chronicle, 3/3). Premium income increased by about 4% to $7.9 billion in 2004.
State Fund earnings increased by 27.7% to $909 million in 2004, and reserves increased by 22.5% to $14.4 billion, the Sacramento Bee reports.
The surplus fell short of the $3.4 billion State Fund needs to meet the level required for private workers' compensation insurers. State Fund officials said they will reach that mark by mid-2005.
In recent years, Insurance Commissioner John Garamendi (D) has questioned whether State Fund's reserves are adequate to cover possible claims and has said that State Fund should meet the same requirements as private workers' compensation insurers.
Department of Insurance spokesperson Norman Williams said State Fund "is still at a level (of) close scrutiny" (Chan, Sacramento Bee, 3/3).
State Fund, which currently provides workers' compensation insurance to about 60% of California employers, plans to increase its surplus, lower its premiums and reduce its market share.
Jeanne Cain, chair of the board that oversees State Fund, said premiums have decreased by 14.9% since January 2004 (San Francisco Chronicle, 3/3).