In a few states, a ____ fund provides the only workers compensation insurance available in that state. Employers who are required to have insurance to meet their financial obligations or wish to do so must purchase insurance from the state fund.

• A. Monopolistic State
• B. Competitive Fund
• C. Assigned Risk Plan
• D. Self-Insured Group

Answer: (A)

When a state operates a monopolistic workers’ compensation fund, that fund is the sole provider of coverage in that state and private insurers are not allowed to write new policies there. Employers who must carry coverage are required to buy it from this state fund to meet their financial obligations. This setup is exactly what the description conveys: the state fund is the only option available for workers’ comp insurance. The other terms describe different market structures—competitive means multiple insurers exist; an assigned risk plan is a mechanism for high-risk workers to obtain coverage through the market, not a single state provider; a self-insured group involves employers choosing to self-insure rather than purchase from a fund.