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Florida’s workers’ compensation market remained competitive and increasingly less expensive for employers in 2009 following sweeping changes made earlier in the decade and clarified in May following a judicial challenge, state insurance regulators said Thursday.

The state’s workers comp system, the nation’s fifth largest, continues to benefit from reforms made in 2003 that included limits on attorney fees and provisions to reduce fraud, the report said.

The result has been dramatic. Cumulatively, workers comp rates have fallen more than 63 percent since 2003, according to statistics compiled annually by the Office of Insurance Regulation.

That includes an 18.6 percent decrease that kicked in Jan. 1, 2009 and was restored in May with the passage of HB 903. The reduction was estimated to save Florida employers about $610 million in premiums. Rates are slated to be reduced again Jan. 1, 2010 by 6.8 percent.

“The 2009 report clearly demonstrates that Florida’s 2003 legislative reforms, combined with the Legislature’s passage of House Bill 903 that restored caps on attorney’s fees, have continued to lead to declines in workers’ compensation rates and stability in the marketplace,” said Insurance Commissioner Kevin McCarty in a statement. “This is especially important for Florida businesses given the current economic environment.”

Worker advocates say the savings are coming off the sore backs, and legs, and arms of employees who are not being adequately compensated for work-related injuries.

Unlike Florida’s property insurance market, which is dominated by the state-run Citizens Property Insurance Corp., private firms continue to provide virtually all workers’ comp coverage in the state. With the exception of a few self-insured groups including the Florida Retail Federation, nearly 250 private companies wrote workers’ comp policies in 2009.

The largest provider, Bridgefield Employers Insurance Co, controls 13 percent of the Florida market, a considerably smaller percentage then the largest carriers in New York, Texas and California where state-run funds are the top providers. Florida’s 10 largest private carriers provided 48 percent of coverage in 2009.

Florida businesses were paying the second highest premiums in the nation early in the decade. Business groups blamed fraud and skyrocketing attorneys fees for the high premiums. Lawmakers responded in 2003 with a series of reforms and a cap on fees.

The caps were challenged and in 2008 the Florida Supreme Court threw out the caps. Lawmakers responded with HB 903, which addressed the court’s concern and restored the limit on how much plaintiffs attorneys can collect in workers comp cases. Attorneys will continue to be paid based on a fee schedule of 20/15/10/5 percent of benefits secured. Hourly fees will not be allowed.

Labor representatives say the loser in the equation is the worker. While attorney fees for workers are capped, businesses can employ lawyers with no such restriction, an inequity that means fewer legitimate cases are being filed, said Rich Templin, spokesman for the Florida AFL-CIO.

The Division of Workers Compensation appears to back up the assertion; its 2009 Annual report shows a significant decrease in all workers’ comp payments, especially those from legal settlements, between 2002 and 2008.

“There is a downside. It’s the worker who gets hurt on the job,” Templin said. “That is the universal downside. Legitimate claims are not being paid.”