This time the Florida Work Comp Market is benefiting the Business Owners who are getting a 9.6% decrease.
For more than a year now, the Florida Work Comp Market has been unstable to say the least. A year ago the National Council on Compensation Insurance (NCCI) recommended a 14.5percent increase which was eventually approved. This increase was in response to two court cases (Castellanos vs Next Door Company and Westphal vs City of St. Petersburg) and state bill 1402. Most within the insurance industry and the business community predicted the state legislatures would enact measures in the first half of 2017 to stabilize the workers comp system in Florida. Those measures failed and the instability has continued.
In response to the lack of response from the Florida Legislature, NCCI has taken steps to stabilize the markets after last years large increase in work comp rates. This years’ recommended decrease includes a statewide average premium decrease of 9.3 percent. NCCI said a large part of the recommended decrease stems from improvement in claim frequency of more than eight percent over the last two years. Because this recommended decrease mostly reflects data that pre-dates the Castellanos and Westphal decisions, it would be wise of insureds to not expect this decreased rate to continue in the future. Carriers are beginning to receive data relating to the impact of Castellanos and Westphal. As this data continues to mature business owners can expect carriers to adjust their rates accordingly.
Florida is a state that requires employers to carry workers compensation coverage. The Florida Office of Insurance Regulation has stated it will review the recommendations by NCCI. They plan to evaluate the impact of this decrease in relation to the insurance marketplace as well as employers. A public hearing to discuss this matter will be conducted in October.
Workers Compensation Insurance in 2017 has been a very changing industry. Especially in the state of Florida and many states are using the issues facing Florida as a cautionary tale to get the system in their state in line.