A significant drop in workers compensation claims frequency and a reduction in the cost of claims have triggered a larger-than-recommended decrease in rates, at the bidding of Florida Insurance Commissioner Kevin McCarty.
The National Council on Compensation Insurance has filed for a statewide average rate decrease of 13.3 percent.
However, McCarty ordered NCCI to amend its filing to bring about a rate reduction of 15.7 percent. McCarty cited 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.
According to the Office of Insurance Regulation, the overall average rate decrease of 15.7 percent would produce a savings of $400 million for Florida employers, and would constitute the fourth consecutive drop since 2003. The cumulative overall statewide average rate decrease for the period would total over 40 percent.
“This will provide a significant boost to Florida businesses and to our state’s economy,” McCarty said. “Not only has the 2003 law produced hundreds of millions of dollars in reduced premiums, it is also delivering benefits to employees more efficiently and fairly and has sharply reduced fraud and abuse in the system.”
A rate hearing on the NCCI filing was held by the Office of Insurance Regulation on Oct. 9.
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