Monopolistic State Fund

DEFINITION of 'Monopolistic State Fund'

A government owned and operated fund that is set up to provide a mandatory insurance service in certain states and territories. Workers compensation insurance is the most common type of insurance provided by monopolistic funds. Employers must purchase their workers comp from the state fund and private companies may not compete for the business.

BREAKING DOWN 'Monopolistic State Fund'

Employers with operations in many states (some of which have monopolistic state funds) may have to purchase stop-gap insurance products to fill the general liability needs not met by the bare bones workers compensation plans in states with monopolistic funds.