Seventh Straight Workers' Comp Rate Cut Proposed for Florida

The National Council on Compensation Insurance filed for an average statewide decrease of 6.8% for workers' compensation rates in Florida for a seventh consecutive year.

If approved, the cuts would lower payments by Florida businesses by more than $166 million, according to the Florida Office of Insurance Regulation. They would go into effect Jan. 1, 2010. A hearing will be scheduled for October.

Lori Lovgren, NCCI state relations executive for Florida, said the proposed reduction reflects both a lower frequency of claims and a lower average claim cost.

"This is welcome news to Florida employers during these challenging economic times," Florida Insurance Commissioner Kevin McCarty said in a statement.

The new rates would reflect a 63.2% cumulative reduction in workers' compensation insurance rates since 2003, according to NCCI data. State reforms adopted that year included provisions for enhanced fraud compliance and revised permanent and temporary disability definitions. It also set new parameters for attorney and physician compensation and improved dispute resolution procedures.

In June, McCarty rolled back a 6.4% rate increase for workers' compensation insurance rates, reinstating an 18.6% rate cut, after Gov. Charlie Crist signed legislation restoring the 2003 cap on attorney fees in workers' compensation cases. H.B. 903 banned hourly fees in workers' compensation cases and returned the state to a sliding contingency scale (BestWire, May 7, 2009). The law reversed the effect of a 2008 Florida Supreme Court ruling in Emma Murray vs. Mariners Health, which reinstated hourly attorneys' fees. The court had determined the previous statutory language to be ambiguous.

The NCCI recommendation is not due to the litigation or subsequent legislation, Lovgren said. "This is only experience related," she said.

The top five workers' comp insurers in Florida in 2008, according to A.M. Best Co. state/line data, were: Liberty Mutual Insurance Cos., with a 21.7% market share; American International Group Inc., 8.3%; Zenith National Insurance Group, 6.7%; FCCI Insurance Group, 5.7%; and Zurich Financial Services NA Group, 5.6%.