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I find it more than interesting that state Fund atempts to steer additional business to larger brokers at the expense of their smaller peers.
State Funds has been attempting to charge way higher than market rates and is now cancelling brokers contracts for lack of production.
While they think this will streamline their operations, I expect it will further deteriorate their image and cost them even more business.
That’s one way to streamline their business (less business)…
I agree with Glenn’s comments. State Fund will further deteriorate and it would be better and cheaper to seek coverage in the surplus lines as it may be more easy to obtain and premiums may be not as high as the state fund for risks inelegible for prefer companies.
Agreed, I don’t expect much change from them.
Now fees will be added by the surplus lines brokers the state fund has hand picked and forcing us to use!!!!! i wonder is Jerry Brown negotiated a kick back from the surplus lines brokers??
gman, not all wholesalers are excess/surplus lines. Surplus lines premium taxes and stamping fees only apply to business written with non-admitted insurers. So there will not be taxes and stamping fees for State Fund business. Broker fees and handling/policy/service fees charged by the two wholesalers to access State Fund… that is to be determined. I often recommend small clients to just walk in to a State Fund office and go direct.
why lose the commissions by having client go direct? and you are right on the taxes/fees….but these wholesalers are not going to work for free, they will put a broker fee on the quote they issue for you and your client.
Tfhis will adversely affect small businesses as they will be forced to pay higher rates and fees. As an agent that has placed business with SCIF for over 25 years, this will not only hurt the small agencies but their clients. This change will also place the clients with agencies that they did not want or request.
How to screw the small business/agency plant.
Fees charged by Wholsalers will increase the cost of W/C and with less direct brokers who do not charge fees: you will find less businesses purchasing Workers Comp Insurance and more employees not being covered. This will mean less revenue for State Fund and more claims with no coverage.
It is a bureaucratic move. Small businesses are the least concern from those policy makers. Instead of improving efficiency, State Fund is blaming on small agencies not contributing enough business. Workers comp ins is mandate coverage; thus all agencies/brokers should have direct access to the State Program.
Has no one done the math? $700 mil increased benefits, with only $500 mil in cost savings. That’s 200 mil more in outgo than income. “Don’t look behind the curtain”. Its not pretty.
Master u/w’er just remember this; liars figure and figures lie. Being a master u/w you know as well as I do these figures given to the public by the WCIRB are chosen to reflect the worst possible scenario….and do you know who runs and sits on the governing committee churning this information? The insurance company executives…..conflict of interest? Your thoughts?
Does not address any commission changes or time constrictions having to go through an intermediary. I am sure that Gallagher and RIC are not doing this pro bono, so how are they being compensated? Is it out of State Fund’s pocket or the individual agent/agency commission?
Will the business be admitted or are taxes going to be imposed as well as other wholesaler or policy fees? Seems like somebody got into the State Fund’s pocket. I would love to have been a fly on the wall listening to all the back room negotiating. This was certainly not done to have any benefit accrue to the smaller independent agent and does not address what happens if and when an agency crosses the 100k threshold. Seems that this whole thing was done behind closed doors, since I cannot fathom any smaller agency wanting to go along with this.
Also, what happens with follow-up customer service? Exempt employee changes, changes to staff, change in company profile, addition of other class codes, etc….will all this have to go through the two entities or direct with SCIF?
In typical political posturing, I see a pending disaster since all these particulars will never be addressed in less than four months and will probably be subject to modification as each state election rolls around.
well unfortunately our clients will foot the bill for any fees and taxes added. you can bet big broker fees will be added by the surplus agencies we are going to be forced to use. so the high rates of the State fund just got more expensive for our clients!!!!
Hi All – This is Riley Binford from StateFund First, one of the approved Access Partners to the State Fund. I noticed that many of you have voiced concerns about the possibility of fees being charged by the Access Partners. Please note that we will NOT be charging any fees. If you have any questions, please feel free to call me at our toll free number at 1-855-784-4433 ext. 8438.
Thank you.