13.5 Percent Workers’ Comp Rollback Concerns Insurance Council in Florida

Concerns about the 13.5 percent workers’ compensation insurance rollback ordered recently by Florida’s Office of Insurance Regulation have been voiced by Sam Miller, executive vice president of the Florida Insurance Council to Insurance Journal.

“FIC supported the National Council on Compensation Insurance recommendation of a 7.2 rate rollback for 2006 but we are concerned about the higher rollback, Miller said. “Hopefully, it won’t force carriers to reduce the new business they can take on or even cut back.” Miller said. “There are no signs of this yet and the larger rollback is good news for Florida employers. It does seem clear that the 30 percent cumulative rollback from the 2003 reforms is all we can squeeze out of the system for the moment.

Miller said the 30 percent rate rollback is a dramatic turnaround and firm indication that the insurance community, state regulators, business community and legislature can work out reforms that truly reduce insurance rates.

“It is unfortunate we have been unable to reach effective agreements like this in other lines. the PIP/no-fault sunset review of 2006 will be an opportunity,” Miller said.

Miller foresees one major workers’ comp issuing looming for 2006: The Florida Workers’ Compensation Joint Underwriting Association will levy an almost $5 million assessment on employer/comp policyholders unless steps are taken by the Legislature and JUA to prevent it.

Jim Watford, Office of Insurance Regulation chief actuary on workers’ compensation, reports that a $4,777,000 deficit in the JUA’s old Subplan D has been pretty much definitely projected and must be financed. Watford told the State Administration Appropriations Committee this fall the JUA will be forced to issue a below-the-line assessment on all workers’ compensation policyholders, except individual self-insured firms, unless another proposal is developed to provide the money.

Miller said the legislature has options, including an additional transfer to the WCJUA from the Workers’ Compensation Administrative Trust Fund.