An overall rate reduction of 18.4 percent for workers' compensation insurance in Florida went into effect on Tuesday, state officials said.
The new rate level was approved by the Office of Insurance Regulation, which said in a statement that this marked the fifth consecutive year of workers' comp rate decreases.
OIR added that the newest rate reductions will give Florida businesses a cumulative decrease of 51.4 percent since legislative reforms were enacted in 2003.
In a report to the Florida Legislature, the OIR said in calendar-year 2006 Florida was the largest comp market dominated by private market insurers (as compared to state-sponsored residual market entities such as those in New York and California).
"The 2007 report provides additional evidence that the Florida Legislature's reforms continue to be effective," said Insurance Commissioner Kevin McCarty. "More important, reductions in workers' compensation rates show that the state of Florida is committed to being a good place to do business."
The report highlighted other favorable trends in Florida's workers' compensation market: Overall workers' compensation claim frequency is following the national trend and is on the decline, which continues to offset any increases in claim severity costs.
Companies were found to be performing well in their underwriting, and the Florida Workers' Compensation Joint Underwriting Association, the insurer of last resort, had only $37.3 million in written premium in 2006–less than 1 percent of the Florida market. Through November 2007, written premium had declined further to $19.2 million.
Florida also saw five new workers' comp writers enter the market in 2006. The five companies are domiciled in Florida, Delaware, Iowa, New York and Wisconsin–"another indication of the vitality of the Florida marketplace," OIR said.
The report is required by the legislature in order to provide comprehensive information to assist in the review of workers' comp rate filings.
Copies of reports from 2004-2006 are available on the Office's Web site at www.floir.com.
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