Florida: NCCI revises filing, seeks comp rate increase after Supreme Court ruling

A recent ruling by the Florida Supreme Court may result in higher workers' compensation rates for the state.

The National Council on Compensation Insurance, which produces and files rates for insurers in many states, filed an amended request seeking an 8.9 percent increase in workers' comp rates. The organization cited a Florida Supreme Court decision that was handed down in late October. In Murray v. Mariners Health/ACE USA, the court ruled that attorneys who represent injured employees in Florida are entitled to "reasonable" fees. Specifically, the decision reinstated hourly attorney's fees in workers' comp cases that were capped by the Florida Legislature in 2003. The reforms eliminated legal fees based on hours worked and substituted it with a fee percentage schedule based on the value of benefits secured.

The NCCI filing comes on the heels of Insurance Commissioner Kevin McCarty's approval to slash workers' comp rates by 18.6 percent. McCarty had asked NCCI to amend its initial request of a 14.1 percent decrease, citing disagreements with the methodology the organization used to calculate the profit factors and trend factors.

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At the time of the approval of the 18.6 percent reduction, McCarty said he expected the NCCI to make a new filing in support of the rate impact that it believed would result from the Murray case. Nearly two weeks later, NCCI filed the request to increase rates by 8.9 percent. The organization said the court's decision may raise costs by more than 18 percent but that the full impact of the ruling may not be felt for a couple of years.

"Florida employers have realized a tremendous savings on their workers' compensation insurance due in no small part to the limitations on attorney's fees that were put in place as a result of the 2003 legislative reforms," McCarty said. "The decision by the Florida Supreme Court will have the effect of returning the law to what it was prior to the 2003 reforms and might significantly erode the savings that have been so important to Florida employers. The Florida Legislature will have to intervene to clarify its intent to limit attorney's fees in workers' compensation cases."

A public hearing on the filing is scheduled for mid-December.

December 2, 2008

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