May 22, 2018

FL OIR Issues Statement on Workers’ Compensation Rate Decrease Filing

Tallhassee, FL – The Office of Insurance Regulation recently announced that it has received the 2018 Florida workers’ compensation rate filing by the National Council on Compensation Insurance (NCCI), which proposes a statewide average premium decrease of 9.6%. This includes a statewide average rate decrease of 9.3% and a reduction of the fixed expense cost applicable to every workers’ compensation policy in Florida from $200 to $160. The new rates would become effective January 1, 2018.

As always, the Office will review the filing to ensure the proposed changes are not excessive, inadequate, or unfairly discriminatory and evaluate its potential effects on the insurance marketplace and employers, who are required by law to carry this insurance on their employees. A public rate hearing will be conducted in October.

NCCI is a licensed rating organization authorized to make rate filings on behalf of workers’ compensation insurance companies in Florida.

NCCI’s Statement is as follows:

The National Council on Compensation Insurance (NCCI) delivered its 2017 workers compensation insurance rate filing to the Florida Office of Insurance Regulation (OIR).

Using the most recent pre-Castellanos/Westphal experience data available, NCCI has recommended an overall premium level decrease of 9.6%, effective January 1, 2018. The proposed reduction represents a continued improvement in claim frequency, more than an 8% decrease in Florida over the last two years, and is the primary driver of the decrease filed with the OIR. In addition to the improvements in loss experience, the filing includes a 1.9% decrease in expense provisions, including a proposed decrease to the Profit & Contingency provision from 2.75% to 2.0%. Florida is a “full rate” jurisdiction which means that the filing includes all components within the rate charged to the policyholder (i.e. general expenses, taxes, profit and contingency, commissions, etc.).

Last year, two separate Florida Supreme Court decisions resulted in changes to the Florida workers compensation landscape. Those cases, Castellanos v. Next Door Company, et al. (April 28, 2016) and Westphal v. City of St. Petersburg, et al. (June 9, 2016) brought about retroactive changes to claimant attorney fee and benefit levels. NCCI submitted a filing which addressed the projected impact of the two court decisions including future upward pressure on claim costs as well as a growing unfunded liability on open claims. OIR issued an order that included a 14.5% premium level increase which took effect on December 1, 2016.

Details of the filing are available here on page two of the statement: NCCI Recommends Decrease to Florida Workers’ Compensation Rates (PDF)


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