A revised workers compensation rate filing for a 13.8 percent decrease by the National Council on Compensation Insurance has been approved by Florida Insurance Commissioner David Altmaier.
The amended filing to NCCI’s August rate request of 13. 4 percent was submitted on Nov. 7 per an order from OIR. The extra .4 percent decrease is attributed in part to a difference in insurers’ profit and contingencies provision, the Florida Office of Insurance Regulation noted in the Nov. 2 order.
The new rates will go into effect Jan. 1, 2019 for new and renewal business.
“Workers’ compensation insurance is a critical operating cost for business owners and the 13.8 percent rate decrease approval will allow employers to better support Florida’s families, visitors and labor force,” Altmaier said. “This most recent decrease marks approximately $454 million in savings for employers and can help facilitate additional cost savings for the communities they serve.”
The decrease represents the third drop in workers’ compensation rates decrease in the two years since significant Florida Supreme Court decisions – Castellanos v. Next Door Company and Westphal v. City of St. Petersburg – created concern and uncertainty over future of the state’s workers’ comp system.
The 2017 policy year will be the first full year since Castellanos, the main driver of a 14.5 percent rate increase after the 2016 Florida Supreme Court decision, but NCCI said the full effects of that decision will not materialize for several years to come.
OIR noted in its Nov. 2 order that any future rate filings must include additional quantitative analysis to determine the effect the Castellanos decision is having on the Florida workers’ compensation market.
“The analysis may include alternative data sources and should examine changes to the Florida workers’ compensation market that are attributed to or observed as a result of the recent court decisions,” the order states.
Since the initial 14.5 percent rate increase in 2017, workers’ comp rates in Florida have decreased. A 9.5 percent decrease was approved for 2018 and an additional 1.8 percent rate decrease was approved in May as a result of the Federal Tax Cuts and Jobs Act.
Florida CFO Jimmy Patronis praised the rate decrease, but noted “we must keep a close watch on Florida’s workers’ compensation insurance market so that we don’t go back to the time of skyrocketing rates.”
This post originally appeared on InsuranceJournal.com.