Florida Office of Insurance Regulation Issues 2015 Workers’ Compensation Annual Report
Jan 15, 2016
The Florida Office of Insurance Regulation (“OIR”) has released the 2015 Workers’ Compensation Annual Report to the Florida Legislature.
The OIR’s analysis shows Florida’s workers’ compensation market continues to remain competitive, well-capitalized and affordable with more than 250 private insurance companies writing over $2.5 billion in premium. Of the six most populous states analyzed, Florida is one of only two where a private market insurance company is the largest insurance company in the state, rather than a state-created residual market entity. In Florida, private insurance companies dominate the market by writing more than 95 percent of the workers’ compensation coverage.
A rate decrease of 4.7 percent effective on January 1, 2016–the second in two years–represents a 60.3 percent cumulative reduction in Florida’s workers’ compensation rates since the 2003 legislative reforms were passed. This is an indication the reform measures delivered the desired result and lowered costs dramatically.
Although these reforms continue to benefit the market overall, it is likely their impact may have reached maximum effectiveness. The OIR is closely monitoring several pending court cases that could negatively affect the workers’ compensation market by leading to increased rates and the State’s inability to retain its competitive advantage in this area.
Medical cost drivers, particularly in the areas of drug costs, hospital inpatient, hospital outpatient and ambulatory surgical centers, are higher in Florida than the countrywide average. Legislative reforms may prove beneficial in addressing these issues.
Overall, Florida’s workers’ compensation system is robust and not overly concentrated. It continues to allow for ease of entry and exit for insurance companies in the marketplace, and the residual market is small relative to the private market indicating reasonable availability.
The OIR is required by law to annually evaluate competition in the workers’ compensation market and to investigate and use data in its review of such rate filings.
To view the report, click here.
Should you have any questions or comments, please contact Colodny Fass.
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