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Insurance Industry
Florida workers compensation a dividing issue
The fallout from the Florida workers’ compensation rate hike is only just beginning and the posturing early on from stakeholders will help shape the collective response.
Already, a lawyer has directed criticism at a national data analyst, who has in turn directly contradicted that lawyer to Insurance Business.
The Florida Supreme Court placed limits on attorney fees in workers’ compensation cases and changed how long term disability rates were calculated.
The rulings prompted the National Council on Compensation Insurance (NCCI) to readjust the compensation rate and, following an unsuccessful court challenge, a 14.5% hike was approved.
Business groups complain the cost of employment is too high, citing workers’ compensation as a major component, while labor organizations say employees aren’t being made whole for their injuries and they’re not returning to work.
A workers’ compensation lawyer, Richard Chait, partner at Touby, Chait & Sicking P.L., wrote a column in the Tallahassee Democrat stating the NCCI’s rate making process wasn’t transparent.
“Ours is one of just four states using an antiquated system that allows a trade group of industry insiders, called the NCCI to have a formal role in setting workers’ comp rates,” Chait wrote in the publication.
“NCCI files just one set of rates to be used by all insurance carriers, virtually eliminating market competition.”
The NCCI said the reason Florida is one of a handful of states that only accepts fully formed rates, including lost costs and expenses, is historical.
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The national researcher, however, also stated Chait’s comments indicated he may not fully understand the situation.
“We operate in one of the most, if not the most, transparent states in the country for the workers’ comp line,” Susan Donegan, the chief regulatory services officer at the NCCI said.
“Perhaps, he just doesn’t understand the level of scrutiny, not only the process undergoes, but the kind of notice, hearing, public examination that happens during the rate process.”
Donegan said every rate and rule filing is available to the public, and there are open forum rate hearings where members of the public can speak and question the rate.
Chait also wrote in his column that “they (businesses) can’t even get a break on their premiums by improving workplace safety. This is a seriously flawed system.”
Donegan again directly contradicted Chait.
“There are certainly discounts…safety programs and training and ways to reduce risk is good for a business and a carrier because that impacts the rate, it makes a better rate,” Donegan said.
“When you’ve got fewer claims and severity is lower, that data will ultimately flow through to what we collect.”
