California’s State Compensation Insurance Fund is the nonprofit insurer of last resort for California employers. This critical backstop provides, as President and CEO Vern Steiner puts it, “fairly priced workers’ compensation insurance to any California business that needs it.”

Catherine Montgomery

The challenges of running a payer with this unique role in the system are significant, but you wouldn’t know it from the most recent annual report on State Fund’s performance.

State Fund met or exceeded its performance goals, advanced technological innovation, drove workplace safety gains and still lowered its combined ratio while producing a $200 million dividend payout for policyholders. 

On top of it all, the insurer maintains an electronic data interchange “grade” of A in daisyBill’s claims administrator directory, which tracks payer compliance with electronic billing laws and regulations. 

In a workers’ comp marketplace too often characterized by inefficiency, rule flouting and ineptitude, State Fund stands out as a model of how payers can get the job done, maintain profitability and compliance, and refuse to make excuses. Keep. It. Up.

This is how you do comp insurance

State Fund released its 2025 Annual Report with a financial summary; its required annual statement to the California Department of Insurance; a report on its finances from independent auditors; and its president’s letter, in which Steiner trumpeted a banner year:

“We excelled in nearly every area of our operation and had, upon reflection, perhaps our most successful year to date in the more than 11 years I have been president and CEO of State Fund. I’m extremely proud of our successes, and even more proud of the leaders and frontline employees who made those successes possible.”

Financially, State Fund is healthy by any measure, with a 2025 combined ratio of 87.4%, down from 89.6% in 2024, putting the insurer in the black even without investment income (for the non-comp nerds out there, any combined ratio under 100% indicates profitability; the lower, the better). On top of that, net investment income came in at $644 million, also an improvement from the year prior. 

Flush with the fruits of its labors, State Fund announced a $200 million dividend payout, bringing the total payouts over the last decade-plus to more than $800 million.

State Fund also actively invested in workplace safety improvements for its members, awarding $10 million in safety equipment grants, enrolling thousands of employers in its Online Safety University, and widely sharing its online Injury and Illness Prevention Program Builder. 

A model for compliance

DaisyBill’s claims administrator directory tracks each payer’s performance in handling electronic bills from our providers. The various metrics are weighted according to their impact on provider revenue management and include:

• E-bill acceptance rates.
• Timely delivery of electronic e-bill “receipts.” 
• Timely delivery of electronic explanations of review.

Each payer gets a “grade” for its performance over the preceding 365 days. As of this writing, State Fund scores a 95% for its consistent A-level performance. 

Even when State Fund inevitably makes a mistake, it quickly acknowledges its errors and does right by the provider. 

This insurer provides an affordable way for almost any business in the state to maintain coverage, goes out of its way to offer workplace safety resources to members, consistently follows state laws and regulations, and makes enough money to spread the wealth via dividends for the last seven years in a row.

What more can California ask?

Catherine Montgomery is the co-founder and CEO of daisyBill, a provider of workers' comp end-to-end revenue cycle management software. This post appears with permission.