Florida OIR Approves 4.9% Comp Rate Cut; NCCI Drops Cat Fund Idea

Florida Insurance Commissioner David Altmaier has approved a 4.9% average decrease in workers’ compensation rates for 2022, as recommended by the National Council on Compensation Insurance.

The decrease is the sixth straight for Florida, and for the first time in four years, Altmaier’s office did not ask the NCCI to revise its plan and produce a larger reduction in overall rates. Last year, the NCCI proposed a 5.7% cut but the Florida Office of Insurance Regulation demanded more and ultimately approved a 6.6% decrease for 2021.

“Safer workplaces, innovative techniques and improved risk management practices have resulted in the continued decline in workers’ compensation claims, ultimately benefitting Florida businesses,” Altmaier said in a news release issued Friday.

Rates jumped in 2017, after a landmark court ruling struck down statutory limits on attorneys’ fees. But loss costs and rates have fallen every year since then.

The latest rate decrease will take effect Jan. 1 for new and renewing policies. An actuarial analysis by the NCCI can be seen here. It shows that while changes in experience, trends and medical and indemnity benefits have declined almost 7% in recent years, loss adjustment expense, or the costs associated with handling claims, increased slightly.

The NCCI’s recommendation, filed earlier this year, did not include data or adjustments needed for the impact that the COVID-19 pandemic may have had on Florida comp insurers. Instead, the rating organization proposed a separate catastrophe fund to help manage nationwide, non-terrorism events that result in workers’ compensation losses of more than $50 million. The fund would have required extra charges to be paid by Florida employers.

But the OIR announced that the NCCI has withdrawn its catastrophe provision recommendation. A Nov. 11 letter from NCCI said the provision “will be resubmitted at a future date as and when appropriate.”

Topics Florida