Insurance Commissioner Tom Gallagher, Florida’s chief financial officer and former insurance commissioner, recently criticized a request by the National Council on Compensation Insurance (NCCI) for a 21.5 percent increase in workers’ compensation rates in Florida and took issue with NCCI’s choice of data to defend that request.
According to the Sarasota Herald Tribune, Gallagher, who heads the recently inaugurated Florida Department of Financial Service, which oversees insurance regulation in the state, accused Boca Raton-based NCCI of manipulating the numbers in several cases to support its argument for higher rates. Gallagher and others have criticized NCCI statistics in the past as favoring the insurance industry, some of whose members own the rating organization.
Although NCCI has a contract with the state to provide statistics and recommend rates, it is paid by insurance carriers. The arrangement has been criticized as creating a conflict of interest.
Created in 1922 as a resource for data on workers’ comp insurance in 10 states, NCCI now collects information from more than 900 insurance carriers and provides statistical data to insurance departments in 36 states. The company’s annual revenues from repackaging and reselling the collected information amount to nearly $150 million.
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