Florida: Proposed WC rate change would mark 7th consecutive decrease

Florida employers may see another drop in workers' compensation rates after the National Council on Compensation Insurance filed for a 6.8 percent statewide average decrease.

If approved, Insurance Commissioner Kevin McCarty said the new rates would go into effect on Jan. 1, 2010, and produce a savings of more than $166 million for Florida employers. The rate decrease would mark the seventh consecutive decline since the Legislature reformed the state's workers' comp system in 2003. McCarty said the cumulative statewide average rate decrease since the reforms would total 63.2 percent.

"This is welcome news to Florida employers during these challenging economic times," McCarty said.

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NCCI, which produces and recommends rate filings for insurers in many states, noted the decline was primarily due to a significant reduction in claims frequency. However, the filing indicated that there are signs that the pace of improvement has moderated.

In recent years, officials have worked to maintain the reforms, which instituted provisions for enhanced fraud compliance, revised permanent and temporary disability definitions, set new parameters for attorney and physician compensation, and improved dispute resolution procedures. Specifically, the attorney's fees reforms have been a source of debate. In 2008, the Florida Supreme Court eliminated the statutory caps on attorney's fees, saying that the reforms made it very difficult for workers to hire attorneys, especially in cases that would generate small attorney's fees. However, lawmakers passed a bill earlier this year to reinstate the caps, averting a potential increase in comp rates.

Before the 2003 legislative reforms were passed, Florida ranked in the top two states with the highest workers' comp rates. However, studies have found that the state had dropped to 28th highest last year. If the latest filing is approved, McCarty said Florida's ranking could be among the 10 lowest states.

The Florida Office of Insurance Regulation will hold a hearing on the proposed rate decrease in October.

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September 25, 2009

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