Claims-Free Credit

The Claims-Free Credit offers State Fund policyholders the opportunity for substantial cost savings. This credit recognizes those policyholders who demonstrate the ability to control their claims costs by providing and maintaining a safe work environment. Qualifying State Fund policies can receive a Claims-Free Credit of 10 percent upon renewal when they meet all of the following criteria:

• Base premium of $24,999 on the renewal year. Base premium is the total amount of premium determined by multiplying the base rate for each applicable class code by the annual payroll estimate for each class before any experience modification score, adjustments, or discounts are applied.
• Continuous State Fund coverage during the qualifying “claims-free” policy period.
• Total paid loss indemnity costs do not exceed $1,000. Note that medical-only claims and the medical portion of indemnity claims do not count towards the $1,000 limit.
• If the minimum premium applicable to the policy is greater than $1,000, the policy will not be eligible for the Claims-Free Credit unless the base premium is at least $1 greater than the minimum premium.

The following table details Claims-Free Credit eligibility criteria for policies renewing as of July 2010:

Please be aware that the policy years used to determine the above are for 2010 renewal base premium calculations. The Claims-Free Credit is based on two claims-free years for policies with renewal base premium of $10,000 to $24,999; and three claims-free years for policies with renewal base premium of $1,000 to $9,999. Keep in mind that the policy years used for determination will change in subsequent years.

Claims-Free Credit for New Policyholders
New State Fund policyholders may receive a Claims-Free Credit of 10 percent if their loss runs from their previous carrier show no claims losses for the required “claims-free” policy period. The following table details the Claims-Free Credit eligibility criteria for new State Fund policies as of July 2010:

If you have any questions, please contact your State Fund representative or call our Customer Service Center.

Note: State Compensation Insurance Fund is not a branch of the State of California.