Florida's workers' compensation rates may go up on Jan. 1, 2012, if a filing today by the National Council on Compensation Insurance (NCCI) receives approval from the Office of Insurance Regulation (OIR).
NCCI cited changes in experience and trends in asking for an overall rate level change of 8.9 percent for 2012. In its request, NCCI states, "Following several years of significant declines, claim frequency in 2009 was up significantly. Preliminary 2010 data also shows claim frequency up further. This might be explained by the impact of the economy on workers' compensation."
NCCI also notes that, even with the increase, "Florida would continue to rank among the 20 states with the lowest workers compensation rates nationally. Florida also has and would continue to have the lowest workers' compensation rates of any state in the Southeast (defined as North Carolina, South Carolina, Tennessee, Georgia, Alabama, Mississippi, and Florida)."
That was not always the case. In 2003, Florida's workers' compensation rates were the second highest in the nation. That promoted state lawmakers to enact major reform legislation to bring down prices. The massive workers' compensation bill passed in 2003 made changes to benefit structures, construction industry exemptions, compliance enforcement, medical services, and examination and investigation of carrier and claim handling entities.
The reforms were widely viewed as positive and sparked seven years of rate decreases—resulting in a cumulative decrease of 64.7 percent from 2003 through 2010. Rates did not rise again until January 1 of this year, when NCCI asked for an 8.3 percent increase; OIR approved a 7.8 percent hike.
NCCI appears to agree with many in the industry who say that the 2003 reforms have run their course. In today's filing, NCCI says, "It has become more evident in recent years that the significant ongoing experience improvements which occurred after the 2003 reform have ended and that the system is operating from a new baseline reflecting the total cumulative effects of the reform." In other words, it's time to adjust rates upward.
The OIR is expected to schedule a public rate hearing on NCCI's request in October.
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