California State Compensation Insurance Fund is pursuing legislation to allow it to offer coverage to California employers who have out of state employees.
Currently, California-based businesses insured with State fund must obtain a separate workers’ compensation policy to cover employees who work out of state. State Fund hopes to amend the California insurance code to allow it to offer workers’ comp insurance that will cover a California employer’s out of state employees, instead of having to work with two or more insurance companies.
“In speaking with brokers across the state, we have clearly heard that this would benefit them by making it easier to do business with State Fund,” according to Jennifer Vargen, State Fund spokeswoman. “One broker in the Bay Area commented that these days almost half of her book has some out of state exposure. This comment reflects the evolving nature of business and the value we can bring to the market.”
Vargen said the current insurance code is ambiguous on whether State Fund can or cannot offer coverage to California employers with out-of-state operations. So, State Fund is sponsoring Assembly Bill 228 to ensure the authority to offer out-of-state coverage is clearly articulated.
“We are confident that this legislation will significantly streamline the insurance process for employers and brokers who are interested in getting a quote from State Fund and provide greater choice and stability to the businesses of our state,” Vargen said. “And coming out of the worst recession in recent memory, removing obstacles to business and job growth in California is a good thing.”
If the legislation passes, State Fund said it would seek reputable, stable and experienced insurance partners through a competitive bidding process to provide front services, including filings, rating plans, rate/quote/issue technology, loss control, premium audit and claims services as required. Risk would be assumed by State Fund under its existing authority to reinsure.
State Fund estimates as many as 20,000 to 30,000 California businesses could qualify for the program.
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