NU Online News Service, Aug. 12, 1:57 p.m. EDT
Officials said under Florida's excess profits law more than 30 workers' compensation insurers calculate they owe refunds to businesses, with Hartford Financial Services Group refunding $48.2 million.
An announcement from Florida Insurance Commissioner Kevin McCarty today said as part of the refund process his agency, the Office of Insurance Regulation and Hartford have entered into a consent agreement for the company to issue refunds or credits totaling $48.2 million to Florida businesses for excess profits it earned on its comp policies for accident years 2004, 2005 and 2006.
OIR spokesman Tom Zutell said the excess profits law, which is one of the few in the nation, states that profit over a certain amount is deemed excess based on a calculation of direct written premium profit and other factors.
Insurers every couple of years are required to make a calculation, he said, and if they have earned excess profit under the law they must return it.
Mr. Zutell said it is an insurer's responsibility to make a report, which OIR actuaries can affirm or send back to the company for adjustment. Once the statement is made final a consent order is issued.
He said there have been 25 excess profit reports made this year, but this includes groups with multiple companies.
Hartford's refund will bring the total amount of refunded excess workers' comp profits for all workers' comp writers in Florida to more than $98.8 million so far this year. Over $29.7 million in excess workers' comp profits were refunded to Florida businesses in 2008, OIR said.
"During these tough economic times, Florida businesses will receive a very significant and important return of premium," said Commissioner McCarty. "Companies certainly are entitled to earn reasonable profits, but the excess profit law protects Florida business owners from paying more than what is actuarially justified."
OIR's statement said Hartford must provide refunds or renewal credits within 60 and provide documentation of its compliance. The company must also certify that it has attempted to locate all policyholders whose refund checks are returned; and, if unable to locate those policyholders, the funds must be processed as unclaimed or abandoned property. Hartford also must pay OIR $5,000 in administrative costs.
Jim Ward, regional vice president of The Hartford's Orlando, Fla. regional office, said "The Hartford its agent and broker partners and its policyholders have long valued the importance of risk management and safety programs,The combination of these loss prevention efforts, along with The Hartford's strong workers' compensation underwriting and risk selection in the state, resulted in lower claims costs. We can think of no better testimony to the partnership achieved between our agents, policyholders and The Hartford than is reflected in the return of these funds."
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