Florida Advances Workers’ Compensation, Commercial Deregulation Bills

The Florida House Subcommittee on Insurance and Banking has approved a bill that would codify the Florida Workers’ Compensation Joint Underwriting Associations’ current rating plan and create the position of Worker’s Compensation Administrator within the Office of Insurance Regulation.

Additionally, the committee passed a bill deregulating rates on a number of commercial lines of insurance, bringing it in line with a bill recently approved by the state’s Senate Banking and Insurance Committee.

Sponsored by Rep. Ben Albritton, (R-Hardee), the workers’ compensation bill (HB 4083) is designed to strike from the law several obsolete provisions that once applied to the FWCJUA. The association was created in 1993 and initial had three categories of risk. Employers were placed in the different categories based on among other things, premiums, number of employees and loss experience.

In 2003, lawmakers created a new subplan D that was designed to provide coverage to small employees with 15 or fewer employees and non-profit organizations. Primarily, the subplan was provided as a safety net for small contractors after lawmakers ended workers’ compensation exemptions in the construction industry. Unlike the other three subplans that had actuarially sound rates, subplan D rates were capped at a small percentage above rates charged in the voluntary market and were assessable policies. The subplan quickly ran up a deficit and in 2004 lawmakers appropriated money from the state’s Workers’ Compensation Administrative Trust Fund to retire the shortage. They also eliminated the subplans in favor of a three tier rating plan.

As of January 31, the association has 746 policies in force representing a written premium of $5.9 million. Tier one represents the largest rating plan with 391 policies and $1.74 million in premiums. Tier 3, which includes the majority of the subplan D policyholders, has 163 policyholders that represent the largest premium volume at just over $3 million. To date, the association has contracted with 606 agencies and 997 producers.

The bill calls for a new administrator to monitor insurance companies’ compliance with the workers’ compensation law. The new position would consolidate the responsibilities of several regulators who are located in different divisions within the Office of Insurance Regulation.

The committee also approved CS/HB 99, sponsored by Rep. Brad Drake (R-DeFuniak Springs). The bill is nearly identical to the one approved by the Senate Banking and Insurance Committee on Monday, putting on the fast track for full legislative approval.

Topics Florida Legislation Commercial Lines Workers' Compensation Talent