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Workers' comp rates drop 6.6%
There’s some good news for Florida businesses struggling to keep afloat during the economic downturn caused by the COVID-19 pandemic: Workers’ compensation insurance rates will decrease by an average of 6.6% effective Jan. 1.
It will be the fourth consecutive year that workers’ compensation premiums have been reduced. Florida Insurance Commissioner David Altmaier issued an order Nov. 12 quietly approving a statewide average 6.6% reduction. The approval came nine days after the National Council on Compensation Insurance, which makes rate filings for the workers’ compensation insurance industry, submitted an amended 2021 filing with regulators.
Altmaier requested the amended filing in an Oct. 30 order. Initially, the organization known as NCCI submitted a proposed statewide average 5.7% reduction. Altmaier, though, demanded the steeper 6.6% reduction, noting the “workers’ compensation marketplace has reported underwriting profit during the last six years, due in part to safer workplaces and a long-term shift from manufacturing to service sectors.”
The NCCI filing is based on data as of the end of 2019, from policy years 2017 and 2018. As such, it does not include claims filed during the COVID-19 pandemic. But it includes experience of claims filed after a major 2016 Florida Supreme Court opinion that tossed out restrictive caps on plaintiffs’ attorney fees in workers’ compensation cases.
The Supreme Court said the caps were unconstitutional. Arguing that the ruling would drastically drive up costs of claims, business groups since 2016 have unsuccessfully pushed the Legislature to reinstate some sort of caps. While Senate President Wilton Simpson said last month he’d be willing to consider workers’ compensation changes during the 2021 legislative session, House Speaker Chris Spowls seemed less enthusiastic.
“Now, kind of the prevailing wisdom is maybe don’t fix something that is not broken at the moment when it comes to workers’ comp and to the rates,” Sprowls told reporters. “Certainly, I’m willing to look at it, but I think certainly the rate trends are a good indicator.”
