Florida House of Representatives Insurance and Banking Subcommittee Reviews Citizens Property Insurance, Workers Compensation
Nov 5, 2013
The Florida House of Representatives Insurance and Banking Subcommittee (“Subcommittee”) met today, November 5, 2013.
Florida Insurance Commissioner Kevin McCarty made a presentation to the Subcommittee on workers’ compensation rate regulation in Florida, explaining the Florida Office of Insurance Regulation’s (“OIR”) rate review process and rating plans. He noted that, since the 2003 workers’ compensation reforms, there has been an overall rate reduction in Florida of 56 percent. He added that a small residual market indicates a healthy workers’ compensation market in Florida, and that this market is functioning well and competitively. Commissioner McCarty expressed concern about pending litigation in the Westphal and Morales cases, as well as the Castellanos case, which relates to attorneys’ fees.
A representative from the National Council of Compensation Insurers (“NCCI”) also addressed the Subcommittee, outlining NCCI’s role in Florida as a statistical agent. Before the changes took effect, workers’ compensation rates in Florida were among the highest in the southeast, but now rates are about average, the representative explained. But, while claims frequency is down, medical severity is increasing.
Christine Ashburn next addressed the Subcommittee and gave an overview of Citizens Property Insurance Corporation’s (“Citizens”) depopulation efforts. She also discussed the technical aspects of a takeout, from an insurer submitting a depopulation plan to the OIR to a policy actually being taken out of Citizens.
Ms. Ashburn noted that Citizens is on track to have fewer than one million policies in January 2014 and said that there has been a reduction in new business. She also highlighted what type of risk Citizens would likely cover if it were a true insurer of last resort.
She also reviewed implementation of Citizens’ new Clearinghouse, in which 16 insurers are participating. Four carriers are expected to “go live” during mid-December as a means of testing the new system.
To view the meeting packet and presentations, click here.
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