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Established in 1914 by the state legislature, State Fund is California's most reliable provider of workers' compensation insurance and a vital asset to California businesses. State Fund supports California's entrepreneurial spirit and plays a stabilizing role in the economy by providing fairly priced workers' compensation insurance, helping California employers keep their workplaces safe, and restoring injured workers.

Dividend Frequently Asked Questions

Why does State Fund distribute dividends?

State Fund is a not for profit organization and our mission is to provide fair pricing for workers’ compensation insurance. When State Fund’s financial position allows, we return money to our policyholders through the declaration of dividends.

Why are we distributing dividends for the 2019 policy year?

Initiatives such as our specialized claims process (1P), our opioid reduction program, and our outstanding investment performance‐‐as well as the general improvement in the workers’ compensation insurance market‐‐have contributed to our excellent financial position and our ability to return money to our policyholders.

What has been approved?

  • On December 31, 2019 State Fund declared an approximate $55 million in dividends to eligible policyholders with policy effective dates between August 20, 2019 and December 31, 2019.
  • This announcement follows State Fund’s mid-year declaration in August 2019 of an approximate $105 million to eligible policyholders on policies incepted between January 1 and August 19, 2019.
  • The dividend declarations for the entire 2019 policy year total approximately $160 million. This amount is approximately 15% of the Estimated Annual Premium (EAP) reported during the time period.

When will dividends be distributed?

Due to the COVID-19 crisis, State Fund is expediting the distribution of 2019 policyholder dividends. In order to ensure faster delivery, we have also relaxed several requirements that can result in delayed payment to policyholders. On and after May 26, 2020, policies that have already expired and met the original criteria for 2019 dividends will begin receiving 15% EAP dividend payments. Beginning June 29, 2020, eligible policies expiring after May 26, 2020, will receive a 15% EAP dividend for their 2019 policy. Dividends are based on the policyholder’s initial EAP and will be calculated within one week of the 2019 policy expiration date.

Since State Fund has relaxed the criteria to qualify for 2019 dividends due to COVID-19, who is eligible? Will I receive a dividend payment?

State Fund previously announced an expanded list of criteria to qualify for dividend distribution. To help ease the financial burden created by the COVID-19 crisis and speed up dividend payments, we have eliminated the requirement that policyholders wait for final billing of their 2019 policy and make final payment.

The new criteria for receiving 2019 dividends include:

  • Policy must have taken effect between January 1, 2019 and December 31, 2019.
  • Policy must not have been cancelled for cause prior to expiration.
  • Short-term policies are now eligible for a pro-rated dividend.

Will Minimum Premium policies receive a dividend payment?

Yes, if eligible, policyholders with Minimum Premium policies will receive 15% of their EAP.

Are there any policies not eligible for dividends?

Policies that were cancelled for cause and remained cancelled during the policy term or cancelled and then insured elsewhere, are ineligible. If a notice of cancellation was received and later withdrawn during the policy term, the policy is eligible as long as it meets all other eligibility requirements.  

How will I be notified about dividends?

State Fund will send a policyholder dividend notice to every employer who had a policy issued in the 2019 calendar year. This statement explains whether you are eligible or ineligible for a dividend. If you are eligible to receive a dividend payment, the statement also explains how the dividend was calculated.

How are dividends calculated?

  • If the policy was in effect for a full year and qualifies for a dividend, the dividend amount is equal to 15% of the initial EAP. This includes Minimum Premium Policies.
  • If the policy was in effect for less than 335 days and qualifies for a dividend, the dividend is equal to 15% of the initial EAP and prorated to the number of days that the policy was in effect.  

If, on the date the dividend check is issued, there is an unpaid premium amount owing for the 2019 or later policies, this unpaid amount is deducted [i.e. offset] from the 2019 dividend payment.


Why are dividends calculated on EAP and not final audited premium?

To encourage policyholders and brokers to help establish accurate Estimated Annual Premium (EAP) and collect accurate premium throughout the year. Dividends will be calculated based upon the EAP provided by the broker or policyholder at the time of policy inception.

How will dividends be delivered?

Dividend checks will be sent via U.S. Mail.

Who can I contact if I have a question about my dividend?

  • Direct policyholders: Contact your assigned underwriter or State Fund’s Customer Service Center at (888) 782-8338
  • Brokered accounts: Contact your Broker

Where can brokers get a list of accounts and their dividend status?

Information is available at State Fund Online.

Will State Fund issue dividends every year?

Under California law it is unlawful for an insurer to promise the future payment of dividends.

How much has State Fund paid out in dividends?

Since its creation in 1914, State Fund has paid more than $5 billion in dividends to policyholders.

Disclaimer: Under California law it is unlawful for an insurer to promise the future payment of dividends under an unexpired workers' compensation insurance policy or to misrepresent the conditions for dividend payment. Dividends are payable only pursuant to conditions determined by the Board of Directors or other governing board of the Company following policy expiration. It is a misdemeanor for any insurer or officer or agent thereof, or any insurance broker or solicitor, to promise the payment of future workers' compensation dividends. Past dividend performance is no guarantee of an insurer's future dividend performance.

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