Revise and Refile Rate Proposal, Florida Office of Insurance Regulation Tells National Council on Compensation Insurance (NCCI)
Nov 5, 2014
In an Order issued today, November 5, 2014, Florida Insurance Commissioner Kevin McCarty notified the National Council on Compensation Insurance (“NCCI”) that its proposed 3.3 percent overall decrease in Florida workers’ compensation rates has been disapproved.
To view the Order, click here.
Substantiating the disapproval, the Florida Office of Insurance Regulation (“OIR”) contended that the NCCI’s use of an increase in the profit and contingency factor from 2.5 percent to 4.5 percent was excessive and unjustified.
“Just last year, NCCI requested and was approved for a 2.5 percent profit and contingency provision and the record does not reflect any significant change in the economy in the past year that would justify a near doubling of the underwriting profit,” Commissioner McCarty said. “Florida’s Workers’ Compensation market is functioning very well, taking into account current economic conditions, and we want to ensure it remains doing so.”
The Order states that the NCCI filing would be approved if it is amended and re-filed by Tuesday, November 11, 2014. Among the OIR’s slate of requested changes are:
- An overall statewide rate level decrease of 5.2 percent, including a 2 percent decrease in annual trend for indemnity costs and a 0.5 percent increase in annual trend for medical costs.
- A profit and contingency factor increase of no more than 2.5 percent.
- A production expense provision no greater than 17.40 percent also applicable to “F” classifications.
- A requirement that the NCCI list and explain each change in its proposed rating manual pages, including the experience rating plan manual and the retrospective rating plan manual
- A requirement that the NCCI provide a report for each quarter of 2015 showing the average intrastate experience modification factor for policies with effective dates in 2015 and for the same policies with effective dates for a comparable period in 2014
- A provision for amonthly NCCI report to the OIR of the average intrastate experience modification factor for policies effective during the month.
The new workers’ compensation rates would be effective January 1, 2015 for new and renewal policies.
The NCCI’s original August 22, 2014 filing proposed a 2.5 percent rate decrease. On September 22, 2014, the NCCI amended its proposed rate decrease to 3.3 percent after the Florida Division of Workers’ Compensation adopted a revised Rule relating to the reimbursement manual for hospitals. That was followed by an October 14 OIR hearing on the rate filing.
To access meeting materials from the aforementioned NCCI hearings, click here.
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