NCCI Proposes Workers Comp Rate Increase for 2012

Florida’s workers’ compensation rates may go up on January 1, 2012, if a filing by the National Council on Compensation Insurance (NCCI) receives approval from the Florida Office of Insurance Regulation (OIR). The filing stated the following:

On August 18, 2011, the National Council on Compensation Insurance (NCCI) delivered its annual workers compensation rate filing to the Florida Office of Insurance Regulation (OIR). Based upon its review of the most recent data available, NCCI has proposed, effective January 1, 2012, an overall workers compensation rate level increase of 8.9%.

Rate Filing Components Impact
Due to Change in Experience & Trend +9.3%
Due to Change in Benefits 0.0%
Due to Change in Expenses (excl P&C) -0.4%
Due to Change in Profit & Contingency Factor 0.0%
OVERALL RATE LEVEL CHANGE +8.9%

Here are some of the key observations:

The cumulative impact of the rate decreases after the 2003 reform was -64.7%. Assuming the filing is approved as proposed, the cumulative impact for the period 10/1/03 through 1/1/12 is -58.6%. NCCI estimates that if this filing were approved as proposed, Florida would compare to other states as follows:

Assuming the filing is approved as proposed, the overall average rate impact at an industry group level would be as follows:

  1/1/12 Filing 10/1/03-1/1/12
Manufacturing +9.6% -54.0%
Contracting +8.7% -61.5%
Office and Clerical +7.0% -59.9%
Goods and Services +9.9% -57.2%
Miscellaneous +8.5% -56.5%
TOTAL +8.9% -58.6%

There are a couple areas where Florida workers compensation cost drivers, if addressed legislatively, could bring system cost savings and assist Florida with maintaining or improving its current ranking:

The OIR is expected to schedule a public rate hearing in October.