Even though the National Council on Compensation Insurance has doubled to 7.2 percent its suggested rate reduction in Florida, Allan Schwartz, an actuary hired by Steve Burgess, an Insurance Consumer advocate says the decrease is not enough and recommends a 22 percent cut; an extra $489 million in premium cuts.
Burgess, who works under Florida’s CFO Tom Gallagher, was quoted by Florida Today as telling Insurance Commissioner Kevin McCarty that NCCI’s estimates “are distorted in the current circumstances.”
NCCI prepares workers’ compensation rate filings for more than 900 insurance companies. A decrease in workers’ compensation rates in 2006 would mark the third straight year that rates would decline and bring good news for Florida business owners who pay to cover lost wages and medical bills for workers hurt on the job.
Burgess contends that by selectively choosing new methodology to predict claims and including data further back in history, NCCI fails to give Florida business owners full credit for the major changes two years ago in state laws limiting benefits, capping lawyer fees and raising fraud penalties.
In addition, he said the company underestimates the investment earnings insurers stand to collect on their cash reserves.
The current savings now seen from 2003 legislation won’t last, Lori Lovgren, NCCI lobbyist countered, especially with lawyers challenging caps on their fees.
“You see this pattern after every reform, but after a while, you see a spike back upwards,” Lovgren testified.
Not all business owners would reap the same premium cut.
Florida ‘s roofing industry already pays among the highest workers’ compensation rates in the state. Under NCCI ‘s current proposal, premiums for roofers would increase slightly, David Shewski, a Sarasota contractor and an officer with the Florida Roofing and Sheet Metal and Air Conditioning Contractors Association told Florida Today.
He pressed state regulators to advocate still-stiffer fraud penalties and to remove all exemptions that allow some business owners to opt out of buying workers’ compensation insurance.
“Fraud and noncompliance continue to be a problem,” Shewski said.
The rates would become effective Jan. 1. McCarty agreed to continue to take written testimony on the proposal for seven days and a decision on the rates is expected soon thereafter.
NCCI is based in Boca Raton and provides workers’ compensation statistics and analyses nationwide. It noted that its Florida analysis was done without data from AIG, the state’s second largest workers’ compensation insurer with almost 13 percent of the market.
Topics Florida Workers' Compensation Talent
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