Which term denotes a state where a single insurer controls the workers' compensation market, limiting private carriers?

Which term denotes a state where a single insurer controls the workers' compensation market, limiting private carriers?

• A. State fund
• B. Monopolistic States
• C. Assigned risk/residual market
• D. Excess insurance

Answer: (B)

In workers’ compensation, a monopolistic state describes a situation where a single insurer—often a state-run fund—has exclusive or dominant control over the market, limiting or excluding private carriers from writing coverage. This means employers in that state rely on the state program for their workers’ comp insurance, not private insurers. That’s why this term best fits the scenario described in the question: one insurer controls the market and private carriers are restricted. The assigned risk or residual market exists to provide coverage for employers who can’t obtain it in the voluntary market, but it doesn’t create a monopoly. Excess insurance is simply additional coverage beyond a primary policy and is not about market control.

In workers’ compensation, a monopolistic state describes a situation where a single insurer—often a state-run fund—has exclusive or dominant control over the market, limiting or excluding private carriers from writing coverage. This means employers in that state rely on the state program for their workers’ comp insurance, not private insurers.

That’s why this term best fits the scenario described in the question: one insurer controls the market and private carriers are restricted. The assigned risk or residual market exists to provide coverage for employers who can’t obtain it in the voluntary market, but it doesn’t create a monopoly. Excess insurance is simply additional coverage beyond a primary policy and is not about market control.