Workers’ compensation premiums may rise by an average of 15 percent next year for many Florida employers, with some employer groups paying as much as a 42 percent rate increase, according to Florida Treasurer and Insurance Commissioner Tom Gallagher.
Gallagher recommended rejecting a proposed 21.5 percent rate hike submitted by the National Council on Compensation Insurance (NCCI) in favor of an 11.9 percent statewide average rate increase effective April 1, 2003. The recommended 11.9 percent average rate change combined with the 2.7 percent average increase approved earlier this year may result in an average rate impact of 15 percent.
Gallagher said he wants to delay implementation of the rate increase until April 1 in hopes that the Legislature will hold a special session on workers’ compensation.
“Our state’s workers’ compensation system is failing. Workers’ compensation premiums in Florida are among the highest in the country yet injured workers receive the least amount of benefits in relation to what employers pay on their behalf,” Gallagher said. “I urge the Legislature to pursue reforms that will result in premium reductions for Florida employers and improve the delivery of medical services to injured workers.”
NCCI, a rating organization that submits rate requests on behalf of insurance companies that write workers’ compensation coverage, submitted its request for a 21.5 percent statewide average increase in workers’ compensation premiums in August 2002.
Last year, Gallagher rejected NCCI’s request for an 8 percent statewide average increase in favor of a more reasonable 2.7 percent change. After lengthy litigation, the rate change did not take effect until August 1, 2002, and applied to all policies renewed after that date.
The maximum impact of the proposed rate change of 14.9 percent among the various trades is broken down as follows: Manufacturing – 42 percent; Contracting – 27 percent; Office & Clerical – 41 percent; Goods & Service – 36 percent; and Miscellaneous – 35 percent.
“Without legislative remedies, many employers will be faced with a double-digit rate hike this year,” Gallagher said.
Topics Florida Workers' Compensation Pricing Trends A.J. Gallagher
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