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Debate Over Workers Compensation Reforms to Continue

Debate Over Workers Compensation Reforms to Continue

The Florida Office of Insurance Regulation (OIR) recently issued an order granting contingent approval to a statewide average rate increase of 14.5% for workers’ compensation insurance.  The approval is conditioned upon the National Council on Compensation Insurance’s making certain revisions to its initial filing, which proposed a 19.6% increase.  As ordered by the OIR, the rate increase would become effective on December 1, 2016 for new and renewal business, with no change in rates for current in-force policies.

The OIR determined that NCCI had not justified the full amount of the proposed 19.6% increase.  Nonetheless, even at the 14.5% level set forth in the order, small business owners and lawmakers have voiced a need to revisit the workers’ compensation law in the 2017 legislative session.  One of the frustrations with the increases is that they are largely attributable to amounts paid to attorneys rather than benefits for injured workers.  On the other hand, the issue will be challenging to address because courts have determined prior legislative changes to be unconstitutional, limiting the legislature’s ability to respond to the increases.

After the legislature adopted reforms in 2003, Florida saw many years of declining workers’ compensation rates and relative stability in the market.  However, recent court decisions and the correspondence increases in rates will prompt a new round of substantial discussions about the state of Florida’s workers’ compensation laws.