Competitive State Fund

Definition - What does Competitive State Fund mean?

Competitive state fund is an agency of the state that competes with private insurance companies in providing workers' compensation in the same state. Commonly this fund is state-operated and state-owned to provide employers options for workers' compensation insurance.

Insuranceopedia explains Competitive State Fund

The primary reason why a competitive state fund is offered is largely for employers. This gives them an extra cushion and control on increasing workers' compensation insurance cost in the face of a business crisis.

Workers' compensation is either provided by the state or a private insurance company. When a state fund does not allow private competition, it is called a monopolistic state fund.

People who are denied policies by private companies usually go to a state fund. This scenario usually happens with those involved in a profession or industry that potentially involves risk like trucking.

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