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What is the State Compensation Fund?

When Arizona passed the first Workers Compensation Act in 1925, the Industrial Commission of Arizona acted not only as the state agency administering claims, but as a state owned insurance company with the authority to regulate other insurers providing workers comp coverage in Arizona.  This presented more than the mere appearance of a conflict of interest.  So in 1968, the legislature created a separate agency, the State Compensation Fund, to be operated as a separate, but still state owned, insurance company.  Since 1991, the State Compensation Fund has operated as a quasi state agency that offers work comp coverage more or less on equal footing with private carriers.  More recently, the “Fund” as it is often referred to, has become more or less a private mutual insurance company.  Renamed SCF Arizona in recent years, the “Fund” continues to evolve into a completely private insurance company with fewer and fewer ties to the state. 

However, many of our clients still confuse the “State Compensation Fund” with the Industrial Commission of Arizona, which is still the state agency governing work injuries in Arizona. 

My experience with SCF Arizona is that it is one of the easiest insurance companies to deal with, both on administration of claims, as well as litigation.  SCF has offices in Phoenix and Tucson, although all claims processing is handled out of Phoenix. 

Chad T. Snow is an attorney who handles exclusively workers compensation claims in Arizona.  He has offices in Phoenix and Tucson and can be reached through his website at Snow, Carpio, and Weekely.