On Wednesday, the National Council on Compensation Insurance presented its filing for Florida's 2016 workers' compensation rates before Florida Insurance Commissioner Kevin McCarty. If approved, on average Florida employers would receive a 2.2% decrease from current rate levels.
From the hearing outset, Commissioner McCarty acknowledged the reality of several cases before the Florida Supreme Court that are not considered in this rate filing but could significantly impact the market's stability and future rates depending on the Court rulings in the coming months.
NCCI actuary Kurt Dooley presented the summary of the rate filing and highlighted Florida's recent economic successes as influencing positively influencing the state's workers' compensation market. The 2003 reforms brought unprecedented string of rate decreases through 2010, then some corrective minor rate increases but now we are in a state is significant stability. The cumulative effect of which have now resulted in 58% decrease from the 2003 pre-reform rate levels, if this filing is approved. Florida is now in line with neighboring states and in the lower half of states countrywide, which is an element of competition for job growth in the state. He noted that growth in payroll and employment levels in Florida has driven increased premium volume in 2014.
During the hearing, Commissioner McCarty and the Office of Insurance Regulation's actuary, Cyndi Cooper, questions of Dooley, centered most about the investment variables and assumptions used by NCCI in preparing the rate filing. NCCI also presented expert economic testimony from David Appel, PhD, and George Zanjani, PhD, concerning the financial and investment scenarios utilized. The dialogue considered that there have been more new companies entering the Florida market to write coverage during the past year and that NCCI's methodology in Florida is the same as that which is utilized in all other states where NCCI makes a rate filing.
AIF's General Counsel, Tammy Perdue, acknowledged the stability of Florida's market that this rate filing demonstrates and stressed the importance of maintaining that stability. She discussed the interplay between pending cases at the Florida Supreme Court with a few of the other issues that are increasing tension in the industry like rising pharmaceutical costs and updating the health care reimbursement manuals. AIF is committed to working with the Insurance Commissioner and other state officials to preserve the successes realized for both employers and employees in the Florida.
The record for this hearing will remain open for public comment through close of business on Monday, October 26, 2015. Please email comments to ratehearings@floir.com; the subject line of your e-mail should read “NCCI”. A ruling is expected next month.
