Pleasanton, CA (WorkersCompensation.com) - State Compensation Insurance Fund's Board of Directors today announced plans to distribute an approximate $105 million dividend to its qualifying policyholders with policies that took effect between Jan. 1 and Aug. 19, 2019. This dividend equals approximately 15% of the estimated annual premium reported in State Fund's mid-year 2019 financial statement and averages out to approximately $1,400 per employer.
State Fund's Board will consider dividends again for the remainder of the 2019 policy year at its February meeting in 2020. While the board cannot guarantee future dividends, this mid-year declaration does not affect the possibility of a future payout for the remainder of the 2019 policy year.
Through July of this year, State Fund is reporting over $662.5 million in premium and over $78.6 million in realized capital gains. Additionally, State Fund has implemented several initiatives over the past few years that have led to improved claims outcomes for injured workers and employers. These efforts, combined with the general improvement in the California workers' compensation insurance environment, have led to a significant decrease in the cost of its claims. This early dividend declaration reflects these positive developments.
“Declaring a dividend at this time helps tens of thousands of California businesses better understand their workers' compensation insurance costs for the year and plan accordingly,” said Vern Steiner, State Fund's President and CEO. “Thanks to effective investment management and improved claims outcomes, we are in a strong, stable financial position and want to return money to our policyholders as quickly as possible.”
Since its creation in 1914, State Fund has paid out more than $5 billion in dividends to policyholders — significantly more than any other California workers' compensation carrier over that time.
State Fund policyholders will begin to receive dividend payments during the second half of next year.
Disclaimer: Under California law it is unlawful for an insurer to promise the future payment of dividends under an unexpired workers' compensation insurance policy or to misrepresent the conditions for dividend payment. Dividends are payable only pursuant to conditions determined by the Board of Directors or other governing board of the Company following policy expiration. It is a misdemeanor for any insurer or officer or agent thereof, or any insurance broker or solicitor, to promise the payment of future workers' compensation dividends. Past dividend performance is no guarantee of an insurer's future dividend performance.
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