Commissioner McCarty Orders Further Decrease Of Workers’ Compensation Rates

Oct 23, 2007

The following information was just released by the Florida Office of Insurance Regulation (“OIR”):




For Immediate Release:


Ed Domansky/Tom Zutell/Jonathon Kees


TALLAHASSEE, Fla. (10/23/2007) – Florida Insurance Commissioner Kevin McCarty announced today that he has disapproved the National Council on Compensation Insurance’s (NCCI) latest rate filing for workers’ compensation insurance rates, due to become effective next year. Commissioner McCarty ordered NCCI to make an amended filing to reduce the rates of workers’ compensation insurance in Florida by 18.4 percent.

The order to amend the filing means a further rate reduction from the NCCI’s originally requested 16.5 percent decrease and would produce a savings of over $700 million for Florida employers. McCarty has asked the NCCI to amend the filing citing disagreements with the methodology NCCI used to calculate the profit factors and trend factors. Trend factors incorporate changes in wages, paid losses and claim frequency. 

“Much of the thanks for positive changes such as these goes to the Legislature for passing the 2003 law that reformed the workers’ compensation system,” said McCarty. “It was both courageous and necessary, because for years workers’ compensation was a troublesome issue for the state.”

Prior to the legislative reforms, Florida consistently ranked No. 1 or No. 2 in the country for the highest workers’ compensation rates; however, post-reform, Florida has dropped out of the top 10 rankings. This 2008 change could drop Florida as far as the mid-twenties depending on the rate changes in the other states.

The amended rate decrease will denote the fifth consecutive drop since the Legislature passed the reforms; and with this change, the cumulative overall statewide average rate decrease since 2003 will be over 50 percent. The 18.4 percent decrease will be the largest one-year decrease in workers’ compensation rates on record for Florida. The five filings since reform represent the largest consecutive cumulative decrease in Florida rates.

The NCCI, which produces and files rates for insurers in many states, said the rate decline was primarily due to a significant drop in claims frequency and a reduction in the costs of claims.

“The rate for roofers is especially noteworthy,” said McCarty. “It would be the lowest the rate has been since 1984 and would represent a 58 percent decrease overall since the new law took effect. We’re aware that the new building codes have increased costs for new roofs; but the good news is that with the decrease, the labor portion would see a favorable effect.”

A public rate hearing on the filing was held in October by the Office of Insurance Regulation. Video of the Workers’ Compensation Rate Reduction Public Hearing <> is available on the Office’s Web site.

The 2003 law instituted 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 addition to making many other changes to the system. Further, the Department of Financial Services Division of Workers’ Compensation has significantly stepped up its compliance efforts to ensure that more employers are buying workers’ compensation insurance to protect their employees, which has added premium to the system.

About the Florida Office of Insurance Regulation
The Florida Office of Insurance Regulation (Office) has primary responsibility for regulation, compliance and enforcement of statutes related to the business of insurance and the monitoring of industry markets. Business units within the Office are organized based on regulatory expertise and include the areas of life and health, property and casualty, specialty lines and other regulated insurance entities. It is within the Office that the mission of public protection is implemented through regulatory oversight of insurance company solvency, policy forms and rates, market conduct performance and new company entrants to the Florida market.

For more information about the Office, please visit <> . If you would like to review and compare homeowners insurance rates in Florida, go to <> .

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