Florida Insurance Commissioner Kevin McCarty said he will approve a 6.1 percent rate increase to become effective January 1, 2013 for workers’ compensation insurance rates in Florida.
The decision was based the National Council on Compensation Insurance rate filing and testimony offered by NCCI in the October 4 rate hearing.
The 6.1 percent figure will officially be approved by the Office of Insurance Regulation (OIR) after NCCI submits some technical changes to its filing, McCarty said.
“NCCI has provided sufficient evidence to support a rate increase based on a variety of cost factors experienced in the marketplace,” said McCarty. “Even with this rate increase, Florida’s rates are still 56 percent below the rates prior to the 2003 reforms, and are competitive with other states nationally. However, I look forward to working with Florida’s policymakers during the upcoming legislative session to address cost-drivers in the system.”
Following the 2003 reforms, Florida experienced seven consecutive years of rate declines, although a chart prepared by the OIR illustrates that this trend has changed in recent years; the OIR approved a rate increase of 7.8 percent in 2010, an increase of 8.9 percent in 2011, and now a 6.1 percent increase that will take effect in 2013.
NCCI submitted evidence about the potential savings that can be realized by addressing cost drivers legislatively. NCCI testified that rates could decline 1.1 percent if Florida addressed the physician drug dispensation issue, and another 5.5 percent if Florida brought its costs in line with other states for in-patient hospital, out-patient hospital and ambulatory care center (ACS) reimbursements.