Florida Workers’ Compensation Joint Underwriting Association Safety Committee Report: April 2010

The Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Safety Committee (“Committee”) met on April 28, 2010 to review the 2010 Cause of Loss and Safety Program Analysis (“Analysis) and determine whether to modify the FWCJUA loss control and safety programs.  Any proposed modifications would include performance standards.

The Analysis was conducted as one of the FWCJUA’s 2010 Business Plan objectives to promote loss prevention and safety in policyholders’ workplaces.  If warranted pursuant to the Analysis, the FWCJUA’s existing safety program would be modified to satisfy any deficiencies in consideration of the organization’s emerging book of business.

FWCJUA Operations Manager Michael Cleary said the Analysis also chronicled 2009 decreases in policies, premiums and losses from the previous year, which is consistent with the FWCJUA’s mission to depopulate itself by uniting clients with voluntary market insurers.

The number of policies in 2009 was 1,026, down from 1,728 in 2008.  Of the 2009 policies, 40.2 percent were minimum-premium policies, equating to an increase from 35.8 percent in 2008.

The relatively large number of minimum-premium policyholders was one reason that participation in FWCJUA safety programs was “not great,” according to Mr. Cleary, because such policies don’t qualify for premium credits.

Premiums decreased to $6.9 million in 2009 from $12.8 million the previous year.

There were 118 claims filed in 2009, compared with 192 in 2008.  Only one of the 118 claims in 2009 was in excess of $50,000, compared with nine of 192 claims in 2008.

Mr. Cleary noted that in 2009, 51 percent of claims were transportation-related.  The Analysis suggested that construction-related claims may have declined as a percentage of total claims because of a decrease in activity in that economic sector.

Other highlights of the 2010 Cause of Loss and Safety Program Analysis include:

• A 41 percent reduction in policy count from 2008 to 2009
• Approximately 10 percent of policies received loss surveys in 2009, compared with 10.5 percent in 2008.
• More than 45 percent of all loss control surveys completed in 2009 related to construction risks.
• Fifty-one percent of claims reported in 2009 were from transportation-related risks.
• The 12.3 percent increase in Tier 1 accounts from 2008 to 2009 is a sign that policyholders may be improving workplace safety and controlling claims.
• The 3-to-1 decrease in minimum premium policy claim counts from 2008 to 2009 is most likely related to a greater majority of minimum premium policyholders using properly insured and exempted subcontractors.
• There was a 38.5 percent decrease in claim counts in 2009 from 2008, which indicates a trend over the past three years.
• Eighty percent of all 2009 claim reports were reported within seven days of the date of loss and 64 percent of 2009 claims were reported within the preferred window of zero to two days from the date of loss.
• Claim severity-not frequency-is a problem, and thus is the focus of loss prevention and claims handling efforts.
• Construction trades continue to be the industry loss leader for severity claims, with the principal causes of loss being different types of falling accidents.
• Residential carpentry, machinery erection and charitable organization-related activities continue as loss leaders for frequency claims, with injuries among fellow workers cited as the principal causes of loss. 
• Types of serious injuries are consistent from year-to-year and reflect the FWCJUA’s book of business composition (i.e., construction trades).

The report concluded that FWCJUA efforts to improve workplace safety appear to be having a positive effect.  The continuation of FWCJUA safety-related programs was recommended. 

Mr. Cleary reported that the FWCJUA chose to end its arrangement with The Online Safety and Security Store (“TOSSS”), a provider of safety products, programs and services to policyholders, after TOSSS requested a $2,000 payment toward the cost of maintaining its Web site hyperlink with the FWCJUA.  It was determined that no FWCJUA policyholders had purchased any products from TOSSS through this hyperlink.

The April 28 Committee meeting materials that include the 2010 Cause of Loss and Safety Program Analysis are attached.

Should you have any questions or comments, please contact Colodny Fass.

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