Dear Agent,

In May 2022, State Fund submitted a rate filing to the California Department of Insurance (CDI) proposing several enhancements to their current pricing structure. The rate filing was accepted by CDI, and on January 15, 2024, they will implement a new pricing model for policies with effective dates of March 15, 2024 and beyond.

This new model delivers greater tailoring to their pricing, adding factors that allow them to focus on the distinct characteristics of each individual employer and deliver targeted pricing for your State Fund clients and all California businesses. This is the latest step in their efforts to evolve their pricing—a journey they’ve been on since they first launched their tier rating system more than 10 years ago. 

Here are a few of the updates you’ll see: 

1) Additional factors will help tailor pricing to each unique business:  

• Loss Cost Multipliers (LCM) provide a broad range in base rates instead of one base rate per class of business. The LCM plan creates seven base rate levels for each class code and assigns the base rate level according to the employer’s risk characteristics, enabling access to more attractive rating outcomes for highly qualified employers. 
• Territory Rating Modifiers, both by geography and industry segment, further increase the spread of outcomes for a business and enhance the accuracy of pricing. State Fund’s new pricing structure expands the number of territories in California to eleven and adds industry-specific variations, resulting in 22 unique factors. These unique factors are used to create a weighted average modifier based on an employer’s payroll distribution, which allows them to further zero in on an employer’s unique characteristics.
• Tier Modifiers add more detailed, employer-specific elements, such as historical data, years of loss experience, and tiers for policy maturity and premium size. These layers will help facilitate a smoother pricing adjustment at renewal.

2) More flexibility in pricing allows State Fund to be well positioned in the marketplace:

• With pricing tailored to the risks of each individual business, they’re now able to serve even more California employers with more competitive rates, in addition to the best-in-class services you’ve come to expect from their team of experts. 

With these enhancements to their pricing model, they will no longer maintain rate deviations for their target class list, as better rating outcomes will be available to all employers who earn it regardless of industry segment or class code.

As your official State Fund Access Partner, we will continue to provide updates about the changes to State Fund’s pricing structure as they come in. In the meantime, please don’t hesitate to contact us at 888-693-7892.

Thank you,

Your Amwins Access State Fund Team