From San Diego in the south to Eureka up north, State Compensation Insurance Fund (State Fund) keeps workers in the Golden State covered. Run like a mutual company, State Fund is a not-for-profit, public enterprise fund. Its primary product is workers' compensation insurance but the company also offers claims management, coordinated care plans, and loss control services to policyholders. Employers can purchase coverage directly from the insurer or through independent brokers. It boasts some 130,000 policyholders. As the insurer of last resort, the independent State Fund was established by the California legislature in 1914.

Geographic Reach

Customers can contact State Fund representatives at offices stretching from Eureka to San Diego.


While it operates in a self-sufficient manner, the company's board of directors and chairman are appointed by the governor of California. The policyholders of State Fund are often affiliated with the 200 employer associations that endorse the company's insurance programs.

State Fund prospered for several years as other insurers withdrew from the workers' compensation market in California. However, as economic conditions impacted the industry at large, its policyholder numbers dropped from 180,000 to 130,000 between 2011 and 2013.

Sales and Marketing

State Fund provides sales, marketing, and support services through its offices located across the state. Its branch locations employ claims adjusters, loss-control representatives, ergonomics specialists, and industrial hygienists.

Financial Performance

Despite a continuing drop in premiums (which fell 8% to $923 million) in 2012, profits increased to $359 million as a result of successful restructuring efforts. (Annual expenses were reduced by about $150 million by the end of the year, and the firm expects restructuring efforts to save $300 million per year by the end of 2014.) State Fund also upped its dividend to $100 million in 2012.

State Fund saw decreased premiums by 12% to $1 billion in 2011 due to reserve reallocations and expenses related to restructuring measures. It reported a 24% decline in profits that year to $130 million due to the issuance of a $50 million policyholder dividend -- the first dividend issued in a decade -- and restructuring costs.


Despite its status as a quasi-public business, State Fund employees are considered state civil servants and as such have been vulnerable to California budget crunches and cuts in the last few years. As a result, State Fund has been implementing a comprehensive restructuring plan to consolidate operations, reduce expenses, and shrink its real estate footprint. During 2010 and 2011 the company relocated some of its corporate operations to less expensive areas and consolidated some facilities. Also, in 2011 and 2012 State Fund reduced its workforce by about 1,800 employees (or about a quarter of its total staff).

To further reduce expenses and increase efficiencies, in 2013 the company launched a new premium threshold that limits access to its direct agency network. At the same time it launched the Access State Fund program, which will continue to provide all brokers access to coverage by State Fund through two authorized broker access partners (Gallagher's California unit and the RIC Insurance General Agency). In addition, State Fund lowered its rates by 7% that year.

Overall, the company expects its cost-control efforts to allow it to maintain fair pricing standards and therefore serve a larger portion of the workers' compensation market in California. Efforts to attract new business include offering group discounts, merit rating plans, claims-free credits, and low-premium plans for select customers. It has also enhanced its online service offerings.

Company Background

State Fund has undergone a number of leadership and board changes in recent years following investigations into conflict-of-interest reports. An sweeping internal review begun in late 2006 revealed conflict-of-interest at several levels of the organization and prompted the resignation of two directors and State Fund's president James Tudor. (The firm has gone through several CEO since then.) A multi-agency criminal investigation was also launched as a result of its findings; that investigation was closed in 2011 without any charges filed against the company.

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333 Bush St Fl 8
San Francisco, CA 94104-2845
Phone: 1 (888) 782-8338
Fax: 1 (415) 565-3389


  • Employer Type: Government Owned
  • President and CEO: Vernon L. Steiner
  • Assistant Chief Counsel: Judith Sapper
  • President and CEO: Vernon L. Steiner

Major Office Locations

  • San Francisco, CA
  • Pleasanton, CA

Other Locations

  • Bakersfield, CA
  • Eureka, CA
  • Fresno, CA
  • Glendale, CA
  • Monterey Park, CA
  • Oakland, CA
  • Oxnard, CA
  • Redding, CA
  • Riverside, CA
  • Sacramento, CA
  • San Diego, CA
  • San Jose, CA
  • San Luis Obispo, CA
  • Santa Ana, CA
  • Stockton, CA
  • Vacaville, CA
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