Florida Insurance Commissioner Kevin McCarty today approved an 8.9 percent initial rate increase request from the National Council on Compensation Insurance.
Although the percentage requested and approved is the same, in the murky world of workers' compensation, McCarty's Order is technically a denial of the National Council on Compensation Insurance (NCCI) initial rate filing made in August.
McCarty says the Office of Insurance Regulation (OIR) did not accept NCCI's methodology for input parameters including policyholder dividends, the loading for these dividends, and investment yields.
He also disapproved the proposed increase in minimum premiums, saying he was concerned about increased costs associated with physician-dispensed repackaged drugs.
The new rates will become effective Jan. 1, 2012 for workers' compensation insurance rates in Florida.
"The rate increase that has been justified would still give Florida the lowest workers' compensation insurance rates among the large states, the lowest workers' compensation insurance rates in the southeast, and most importantly, a 58.6 percent cumulative decrease from the highs prior to the legislative reforms in 2003," McCarty says.
Physician-dispensed repackaged drug costs, which are argued to be higher than pharmacies because of the repackaging codes, are a thorn in the side of workers' comp insurers in the state.
McCarty says that "it is imperative that the Florida legislature address this issue during the upcoming legislative session."
Prior to legislative reforms enacted in 2003, Florida consistently ranked No. 1 or No. 2 in the country for the highest workers' compensation rates; however, post-reform Florida rates have become some of the most competitive in the nation, according to the OIR, although rates are again increasing year-over-year.
Florida's 90-day legislative session begins Jan. 10, 2012.
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