NCCI Recommends Fla. Comp Rate Reduction

NU Online News Service July 29, 12:50 p.m. EDT?The rate setting agency for Florida's workers' compensation system has said it recommends a cut of up to 14 percent for some workers' comp insurance premium rates.

The reduction, proposed by the National Council on Compensation Insurance, is a consequence of savings the NCCI estimates will result from new legislation reforming the Florida workers' comp system.

The measure (Senate Bill 50A) was signed by Republican Gov. Jeb Bush on July 15. On July 16, the Office of Insurance Regulation ordered NCCI to make a filing to reduce rates to reflect the cost savings associated with the new measure

NCCI said it made its recommendation on July 18, after the OIR mandate.

This filing proposes a rate level decrease of 14 percent for industrial classes and an overall decrease of 10.47 percent for classifications related to the US Longshore and Harbor Workers Act. There are less than 20 such "F" classes, which are covered under federal rather than state law. The proposed rate level decrease represents a decrease of $420 million in workers compensation costs, NCCI estimated.

NCCI said the reduced rates will apply to new and renewal policies effective on or after Oct. 1. Additionally, the reduced rates will apply to all policies in effect Oct. 1 on a pro rata basis through the remainder of the term of these policies.

Other revisions, referred to as revised rating factors, will be effective Oct. 1 for new and renewal policies only. NCCI said the factors include those related to the coinsurance and deductible programs, the retrospective rating program, and other miscellaneous values, but not including experience rating factors.

The revised rating factors will not apply to policies outstanding on Oct. 1. This filing does not propose changes to the experience rating factors, NCCI said.