Although the Florida workers’ compensation market is still under stress, and the Florida Workers’ Compensation Joint Underwriting Association (FWCJUA) prepares to post hefty deficits, observers are confident that reform legislation passed last year will help improve the situation.
“It took several years for workers’ compensation market conditions to get this bad, and it will take several more years for Florida to dig its way out,” said William Stander, the Tallahassee-based regional manager for the Property Casualty Insurers Association of America (PCI). “But insurers are committed to the market, and we expect to see some positive changes in the coming months.”
The FWCJUA, Florida’s market of last resort for workers’ comp coverage, reported deficits for last year and could see deficits of as much as $42 million in 2004. However, the deficits were the direct result of a contractor-supported provision in S.B. 50A, legislation passed last session that required JUA rates to be reduced by more than 118 percent in order to make standard-market workers’ comp coverage more available and affordable to Florida employers.
“And we’re already seeing results,” Stander added. “On average, Florida employers buying workers’ comp coverage from the standard market have seen a 14 percent rate decrease over last year’s premiums. I’d call that a solid sign of recovery.”
Under the law passed last year, the JUA must offer workers’ comp coverage to companies with fewer than 15 employees for 25 percent above market rates and to nonprofit organizations for 10 percent above market rates. Although the JUA is asking legislators to consider passing a bill that would allow the JUA to increase rates or become more restrictive about offering discounted policies, insurance industry spokespersons are reportedly confident the standard market will recuperate sufficiently to pick up the slack.
“We would caution Florida lawmakers to give the reform legislation a chance to work,” Stander said. “New fraud enforcement measures authorized by the legislation, including a curtailment of illegal exemptions, will directly address the problem and further help stabilize the Florida comp market.
“Legislators, meanwhile, should be wary of calls for a heavily subsidized JUA. Proponents of such a pseudo-state fund, many of whom were previously operating illegally, simply want to avoid paying the true cost of coverage – coverage that protects the lives and livelihoods of Florida’s workers.”
With 42 member companies domiciled in the state, PCI member companies write 39.4 percent of all property/casualty insurance in Florida, and 41.7 percent of the state’s private workers’ comp coverage.
Was this article valuable?
Here are more articles you may enjoy.