Florida officials said that Hartford Financial Services Group will issue refunds or credits totaling $48.2 million to Florida businesses for excess profits the insurer earned on policies written from 2004 through 2006.
The insurer credits strong loss prevention and safety efforts for “outstanding results in its workers’ compensation business,” qualifying customers for the refunds.
“The combination of these loss prevention efforts, along with The Hartford’s strong workers’ compensation underwriting and risk selection in the state, resulted in lower claims costs. We can think of no better testimony to the partnership achieved between our agents, policyholders and The Hartford than is reflected in the return of these funds,” said Jim Ward, regional vice president of The Hartford’s Orlando, Fla. regional office.
While workers’ compensation rates are filed with and approved by the Florida Office of Insurance Regulation (OIR), the state also has an excess profits law that limits the maximum underwriting profit insurance companies can generate over a three year period.
Each year, insurers must file their premium, loss, and expense results for the three previous years with the state. For example, the 2008 filing included data for calendar years 2004, 2005 and 2006. The OIR then applies a formula to the data. If the formula results in an excess profit, the insurer generally must return the excess amount to policyholders.
Insurance Commissioner Kevin McCarty said The Hartford’s refund will bring the total amount refunded under the excess workers’ compensation profits law to more than $98.8 million so far this year.
More than $29.7 million in excess workers’ compensation profits were refunded to Florida businesses in 2008.
“During these tough economic times, Florida businesses will receive a very significant and important return of premium,” said McCarty. “Companies certainly are entitled to earn reasonable profits; but the excess profit law protects Florida business owners from paying more than what is actuarially justified.”
The Hartford must provide refunds or renewal credits within 60 days.
Topics Florida Profit Loss Workers' Compensation Excess Surplus
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