Florida Treasurer and Insurance Commissioner Tom Gallagher issued a consent order in the last week rejecting an 8 percent rate hike in workers’ compensation premiums in favor of a modest 2.7 percent. Gallagher’s decision will save Florida employers nearly $186 million in workers’ compensation premiums.
The National Council on Compensation Insurance (NCCI), a rating organization that submits rate requests on behalf of insurers that write workers’ compensation coverage, submitted its request for an 8 percent statewide average increase in workers’ compensation premiums in Sept. 2001.
In Nov. 2001, Gallagher rejected NCCI’s request for an 8 percent increase in favor of a more reasonable 2 percent change. The rate change would have taken effect on Jan. 1, 2002.
However, NCCI disagreed with Gallagher’s decision and requested a formal hearing with the state’s Division of Administrative Hearings (DOAH).
On April 12, an administrative law judge issued an order upholding Gallagher’s disapproval of the 8 percent rate request and remanded the case back to the Department of Insurance. State law requires the Treasurer and Insurance Commissioner to issue a final order after a formal hearing is held.
Under the consent order, Gallagher upheld his decision to disapprove NCCI’s request for an 8 percent increase and instead agreed to a 2.7 percent change, effective August 1, 2002, for new and renewal business. NCCI has waived its rights to appeal Gallagher’s decision.
Insurance companies currently collect about $2.7 billion per year in workers’ compensation premiums in Florida.
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