The Florida Office of Insurance Regulation (OIR) has approved 6.4 percent increase for workers' compensation rates, effective April 1.
The National Council on Compensation Insurance (NCCI) amended its filing to request an increase of 6.4 percent after Insurance Commissioner Kevin McCarty issued an order denying a filing for an 8.9 percent increase earlier this year, the OIR said in a statement.
OIR asked NCCI in January to reduce its increase request by 2.5 points to 6.4 percent.
NCCI initially sought the hike in a Nov. 14 filing after the Oct. 23, 2008 court decision, Emma Murray vs. Mariner Health and ACE USA, which lifted restrictions on fees for attorneys representing injured workers.
The Florida Supreme Court decision found that the 2003 workers' comp reform legislation related to attorney fees was contradictory.
NCCI said the ruling eliminated the statutory schedule for claimant attorney fees and returned Florida to pre-reform law on claimant attorney fees, namely hourly fees, and estimated that the full impact of the Murray ruling would be an increase in overall Florida workers' compensation system costs of 18.6 percent.
The OIR said in its statement, "In its Nov. 14 filing, the NCCI had proposed spreading an 18.6 percent rate increase over two years – 8.9 percent for the first year, to become effective March 1 – for the voluntary market for all new and renewal workers' compensation insurance policies written in Florida."
Asked if NCCI had the same idea in mind with the revised 6.4 percent increase, and whether it will file for a second increase next year, Lori Lovgren state relations executive for the NCCI said yes, but the amount is undetermined.
"In theory, we could file another 6.4, or we could file another 8.9…or we could file the difference between 6.4 and 18.6, which was our original number," she said.
She added NCCI will be collecting data and conducting surveys before it makes a final decision.
The OIR said the approved 6.4 percent rate increase will add about $172 million in insurance costs for Florida employers.
"Although it is still somewhat early to know for sure what the full impact of the Supreme Court's decision on workers' compensation rates will be, I felt it was necessary to approve this modest increase," said Commissioner McCarty.
He added, "I hope that the legal and business communities will be able to come to an agreement on a plan for legislation that will maintain appropriate access to the legal system for injured workers while also still keeping workers' compensation rates affordable for employers."
The OIR noted that the rate increase in combination with an 18.6 percent rate decrease that took effect Jan. 1 still results in net savings to Florida employers of $438 million.
The NCCI filed for the rate decrease prior to the court ruling, and it was approved in October, according to OIR spokesman Ed Domansky. But after the Murray decision, the NCCI filed again for an increase.
Normally, Mr. Domansky said, there is only one filing in any one annual period.
The OIR noted that prior to the 2003 reforms, Florida consistently ranked first or second in the country for the highest workers' comp rates. Since the reforms, Florida has dropped out of the top 10 rankings.
(Phil Gusman can be reached at pgusman@nuco.com, 201-526-2346)
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