Workers’ Compensation Filing Approved: Rates Set To Drop For Fourth Straight Year
TALLAHASSEE (10/31/2006) – Florida Insurance Commissioner Kevin McCarty has approved an amended rate filing submitted by the National Council on Compensation Insurance (NCCI). The action will lead to a decrease in workers' compensation insurance rates by a state wide average of -15.7 percent effective January 1, 2007.
The overall average rate decrease of 15.7 percent will produce a savings of over $400 million for Florida employers. This is the fourth consecutive drop in rates since Gov. Bush and the Legislature passed sweeping reforms to the state's workers' compensation system in 2003. The cumulative overall average rate decrease for the period totals over 40 percent.
"At the time Governor Bush and the Legislature finalized the landmark reforms to the workers' compensation system in 2003, I felt we would see substantial rate relief for Florida's employers along with increased availability of coverage," said McCarty. "However, the actual results we have experienced are nothing short of remarkable."
McCarty asked NCCI to amend its original filing citing disagreements with the methodology NCCI used to project losses and with the trend factors used in the filing. Trend factors incorporate changes in wages, paid losses and claims frequency.
The overall average rate impact of the NCCI filing at an industry group level will be:
1/1/07 Filing Cumulative 10/1/03 – 1/1/07
Manufacturing -15.4 % - 36.6 %
Contracting -16.0 % - 41.6 %
Office and Clerical -16.2 % - 37.5 %
Goods and Services -15.3 % - 40.2 %
Miscellaneous -15.7 % - 44.6 %
TOTAL -15.7 % - 40.6 %
Florida's workers' compensation system was weighed down with high liability coverage costs for employers and few benefits for injured employees before the 2003 reforms were enacted. Workers' compensation rate changes in Florida following the reforms were:
Date Change Change
10-1-2003 -14.0% -14.0%
1-1-2005 -2.3% -5.1%
1-1-2006 -7.2% -13.5%
1-1-2007 -13.3% -15.7%
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