Florida Intends to Raise WC Rates, Address Cost Drivers

The Florida Office of Insurance Regulation intends to increase the region's workers' compensation rates by 6.1 percent effective Jan. 2013, the state's insurance commissioner announced on Monday.

The decision to approve the hike was based on testimony offered by the National Council on Compensation Insurance (NCCI) in an October 4 hearing, which followed the Council's latest rate filing.

 “NCCI has provided sufficient evidence to support a rate increase based on a variety of cost factors experienced in the marketplace,” says Florida Insurance Commissioner Kevin McCarty. “Even with this rate increase, Florida’s rates are still 56 percent below the rates prior to the 2003 reforms, and are competitive with other states nationally. However, I look forward to working with Florida’s policymakers during the upcoming legislative session to address cost-drivers in the system.”

According to the evidence submitted by the NCCI, addressing Florida's physician drug dispensation issue would decrease rates by 1.1 percent. The Workers' Compensation Research Institute (WCRI) reports that Florida has the second-highest level of physician-dispensed prescriptions among the states studied by the Institute, and that such drugs represent almost half of all workers’ comp prescriptions in the state.

Another 5.5 percent would be saved if Florida aligned its costs with the rest of the states for in-patient hospital, out-patient hospital and ambulatory care center (ACS) reimbursements. Currently, 68 percent of the sunshine state's total benefit costs are medical, compared to the countrywide average of 59 percent for medical benefits, and higher than the national average for the services listed above.  

A seven-year rate decline trailed Florida's 2003 workers' compensation reforms, although the Office signed off a premium increase of 7.8 percent for new and renewal business in 2010, an increase of 8.9 percent in 2011, and this most recent proposal of a 6.1 percent increase. 

In 2010, McCarty similarly reasoned that Florida would still have the "lowest rates in the southeast" after seven years of consecutive cumulative declines.

About the Author
Anya Khalamayzer, PropertyCasualty360.com

Anya Khalamayzer, PropertyCasualty360.com

Anya Khalamayzer is Assistant Editor of Risk for PropertyCasualty360-National Underwriter. Khalamayzer graduated from CUNY Baruch College after intensive internships with Time Out New York Kids and Crain’s Investment News. Keenly interested in environmental science, music and the arts, her articles have been published in Gotham Gazette, Wonkster blog and Ear to Mind magazine. She can be reached at akhalamayzer@summitpronets.com

Comments

Resource Center

View All »

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

Get $100 in leads with $0 down!

NetQuote's detailed, real-time leads have boosted sales for thousands of successful local agents across the...

The Growing Role of Excess & Surplus Lines in Today’s...

The excess and surplus market (E&S) provides coverage when standard insurance carriers cannot or will...

Increase Sales Conversion with this Complimentary White Paper

This whitepaper will share proven techniques - used by many of the industry's top producers...

D&O Policy Definitions: Don't Overlook These Critical Terms

Unlike other forms of insurance where standard policy language prevails, with D&O policies, even seemingly...

Environmental Risk: Lessons Learned from Willy Wonka and the Chocolate...

Whether it’s a chocolate factory or an industrial wastewater treatment facility, cleanup and impacts to...

More Data, Earlier: The Value of Incorporating Data and Analytics...

Incorporating more data earlier in claims lifecycles can help you reduce severity payments by 25%*...

How Many Of Your Clients Are At Risk Of Flood?

Every home is vulnerable to flooding. Learn four compelling reasons why discussing flood insurance with...

Gauging your Business Intelligence Analytics Capabilities and the Impact of...

Big Data, Data Lakes and Data Swamps, How to gauge your company's Big Data readiness....

Workers' Comp Watch eNewsletter

Receive critical business insights into issues related to worker's comp insurance. Sign Up Now!

Advertisement. Closing in 15 seconds.