State Compensation Insurance Fund filed its Annual Statement for the year ending Dec. 31, 2003 with the California Department of Insurance today, showing total assets of $15.287 billion (including long term investments of $12.6 billion), total liabilities of $13.201 billion and a policyholder surplus of $2.086 billion. The reported surplus was a $637 million increase over the insurer’s $1.449 billion surplus at year-end 2002.
Other financial highlights include: Earned premium in 2003 reached $7.633 billion. Investment earnings were $690 million for 2003 and net income was $712 million.
State Fund President Dianne C. Oki commented, “We are very pleased to report our 2003 results. In recent years State Fund has been called upon to meet the needs of a workers’ compensation market rocked by increasing medical claims costs and a significant number of private carrier insolvencies. We have met unprecedented demand for insurance from both old and new customers. This resulted in both operational and financial challenges for State Fund. I believe we have now turned a corner on these challenges.
“The Legislature adopted medical reforms in 2003 that for the first time in several years allowed us to decrease rates slightly as accounts renew in 2004. We have moved aggressively to take advantage of those cost saving opportunities.”
Oki added, “While 2003 was a good start, the job is not done. Insurance rates can be further reduced through further cost reductions. We need to encourage private carriers back into this market in greater numbers and State Fund needs to build additional surplus to reach industry standard levels. We are confident that these are all achievable goals going forward.”
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