State Compensation Insurance Fund has announced that it will pay out a dividend to qualifying policyholders for the first time in a decade. The state’s largest workers’ comp carrier plans to disburse a total of $50 million in the form of a dividend, mostly to employers who have paid their premiums in a timely fashion.
Originally State Fund wanted to pay the dividend only to policyholders that were renewing their policies for 2012, but after touching off questions over the policy’s legality, it reversed and eliminated the requirement. Typically too, dividends are made available only to companies that keep their claims to a minimum.
The State Fund board, which announced the credit in November, said it had waived the renewal requirement, following discussions with the California Department of Insurance.
The dividend resolution approved by State Fund’s board lays out the prerequisites for a cash dividend or a credit upon renewal:
• Completion of the final audit on the insured’s 2011 policy within 18 months of the 2011 policy’s renewal or effective date.
• The policyholder is up-to-date with all premium payments when the cash dividend or renewal credit is awarded.
• It is determined that the policyholder is complying with all policy requirements.
If you think your company may qualify, speak to your broker.