TALLAHASSEE – Citing continued losses in the workers' compensation market and increasing availability problems, Kevin McCarty, Director of the Office of Insurance Regulation, announced today that workers' compensation premiums are expected to rise by an average of 13.7 percent statewide beginning April 1, 2003.
"The Office of Insurance Regulation is sensitive to the impact that rate increases have on Florida's businesses," McCarty said. "However, losses and exposures in the workers' compensation market have hindered insurance companies' willingness to provide coverage. Adequate rates and reforms are needed to reinvigorate the market so that coverage is available to Florida employers."
Last August, the National Council of Compensation Insurance (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.
Under a November order issued by the Department of Insurance, now the Office of Insurance Regulation, NCCI's request was rejected and the NCCI was required to notify employers of an increase of an average of up to 11.9 statewide. However, implementation of the rate increase was delayed until April 1, 2003 to give state lawmakers the opportunity to consider recommendations from the Governor's Commission on Workers' Compensation Reform. McCarty served as a member of this commission.
A final order was issued late yesterday by McCarty requiring NCCI to resubmit its rate filing. Factors considered in issuing the order include the NCCI submitting additional information, escalating growth in the Florida Workers' Compensation Joint Underwriting Association, and increasing availability problems for small businesses. Although the exact rate effect on individual insureds has not been determined, the overall rate increase will be 13.7 percent.
"If the Legislature adopts many of the reforms proposed by the Governor's Commission, it is certainly possible that an adjustment can be made to the rates," McCarty stated.