Fla. Pumping Millions Into Comp JUA

Fla. Pumping Millions Into Comp JUA

NU Online News Service, May 7, 2:24 p.m. EDT?An insurance trade group said they are hopeful that recently passed legislation in Florida will fix the woes of the Joint Underwriting Authority, which provides workers' compensation coverage for difficult risks.[@@]

JUA wound up in a financial crunch after last year's round of legislative tinkering with the state's workers' compensation system, said William Stander, regional manager for the Property Casualty Insurers Association of America. Mr. Stander said Gov. Jeb Bush is expected to sign the legislation into law.

A spokesman for the governor said he has 15 days to review the bill. He confirmed that Mr. Bush in early negotiations had supported legislative changes for the JUA.

HB 1251, approved by the House and the Senate, would provide an immediate cash infusion for the JUA to address the current deficit, estimated at $9 million for 2003.

PCI and other insurance organizations lobbied for the measure, which provides an immediate $10 million transfer to the JUA from the Workers' Compensation Administrative Trust Fund; an additional $10 million available for future deficits, and a 2008 sunset for the funding mechanism and for the deficit below the line assessments.

Mr. Stander said that the JUA ran into trouble when omnibus legislation to fix the Florida comp system included a provision that capped the rates JUA could charge at 125 percent above the state comp rate based on National Council on Compensation Insurance calculations.

Before the cap was set "rates were actuarial and JUA was self funded," Mr. Stander said, explaining that rates for JUA coverage were 200 to 300 percent higher than the filed rate because its clientele included many smaller employers with large numbers of claims.

When the cap was put in to help small employers "We said then it would lead to deficit," said Mr. Stander. He said difficulties created by the cap had been aggravated by changes in the system designed to include more construction workers in the system.

He said the new JUA bill places businesses in tiers based on accident loss experience rather than business size. Mr. Stander said this helps deal with the phenomenon of contractors who suddenly "pop up" with injured employees that need coverage. "They get placed in tier with highest rates," he said.

Mr. Stander said insurers were hoping the change will help JUA, which this year has a projected $36 million deficit.