In some states, employers may obtain workers' compensation through what type of fund described as competitive?

• A. Self-insured group
• B. Assigned risk plan
• C. Monopolistic fund
• D. Competitive fund

Answer: (D)

The concept being tested is how workers’ compensation funding can be organized in a way that introduces market competition among insurers. A competitive fund means multiple insurers (private carriers or state funds) compete to provide coverage to employers within the state. This creates pricing and service competition, giving employers options and potentially lower premiums or better terms. It contrasts with a monopolistic fund, where a single entity is the sole provider, removing market competition. It also isn’t about self-insuring—where employers assume the risk themselves—or an assigned risk plan, which is a state pool for employers who can’t obtain coverage in the voluntary market. So, the option described as competitive fund best fits the idea of a funding arrangement with competition among insurers.