What is a state fund that sells workers compensation insurance in competition with private insurers?

• A. Monopolistic state fund
• B. Self-Insured Group
• C. Assigned Risk Plan
• D. Competitive fund

Answer: (D)

A competitive state fund is a state-backed program that writes workers’ compensation insurance and competes with private insurers. It provides an option for employers alongside private carriers and aims to keep prices and service levels in check through market competition. This differs from a monopolistic state fund, which is the sole writer in that state with no private competition. The assigned risk plan is a way to place high-risk employers into the residual market, not a fund that competes in the standard market. A self-insured group consists of employers who self-insure or pool resources rather than buying coverage from a state fund. So, the description that fits a state fund selling coverage in competition with private insurers is a competitive fund.