Florida approves 1.8% workers comp rate cut
The Florida Office of Insurance Regulation (OIR) has approved a 1.8 percent rate decrease for workers’ compensation insurance in Florida. The decrease was filed by the National Council on Compensation Insurance (NCCI) in a law-only filing resulting from the effects of the Federal Tax Cuts and Jobs Act, according to a statement from OIR.
OIR said the overall rate level change is a 1.8 percent decrease due to a change in the profit and contingency (P&C) factor to 0.5 percent from 1.85 percent. NCCI’s analysis to determine the revised P&C reflects provisions from the recently-passed Tax Cuts and Jobs Act, including top corporate tax rate decreases, changes to reserve discount factors, and other factors. This applies to both new and renewal workers’ compensation insurance policies effective in Florida as of June 1, 2018.
“NCCI has demonstrated through its rate filing that this decrease is an actuarially-sound response to the savings workers’ compensation insurers have realized as a result of recent federal legislation,” said Florida Insurance Commissioner David Altmaier. “The data indicates that passing the savings along to businesses through a rate decrease is an appropriate response at this time.”
The decrease is the second approved by OIR for workers’ compensation rates in just six months. In November, NCCI’s filing for an overall rate decrease of 9.5 percent and premium level decrease was approved with the new rates taking effect Jan. 1, 2018. The rate decrease was especially welcome after two 2016 Florida Supreme Court decisions led to an increase of 14.5 percent for 2017.
NCCI said at the time declining loss ratios, with a significant reduction in the lost-time claim frequency between 2001 and 2015, helped contribute to the 2018 rate decrease.
Florida Chief Financial Officer Jimmy Patronis praised the most recent rate reduction, saying reducing insurance costs and financial burdens helps the business community.
“Businesses in Florida support our local communities, create jobs, and help our state’s economy. This rate reduction is a much needed insurance cost savings for Florida businesses,” Patronis sad.
The National Federation of Independent Business (NFIB) also praised the rate reduction as welcome news for small business owners, but warned the underlying cause of workers’ comp rate inflation – out of control attorneys’ fees – has yet to be addressed.
“Until we cap attorneys’ fees, unstable workers’ comp rates are the real threat to the small business community in Florida,” said Bill Herrle, NFIB/Florida Executive Director.