NCCI recommends significant drop in workers’ compensation premiums


The ratings agency that recommends workers’ compensation insurance premium levels in Florida on Monday recommended a 13.4 percent reduction, to take effect Jan. 1.

A summary released by the National Council on Compensation Insurance, or NCCI, cites “continued significant improvement in loss experience.”

“This is consistent with prior experience filings in Florida and in line with most filings submitted thus far by NCCI in other states in 2018,” the document says.

“More specifically, the long-term decline in claim frequency has continued to more than offset moderate increases in claim severity. This has resulted in continued downward pressure on the overall average rate level need and is consistent with trends across most NCCI states.”

The Florida Office of Insurance Regulation will review the proposed rates.

Earlier, the organization had blamed Castellanos v. Next Door Co. and Westphal v. City of St. Petersburg, two 2016 Florida Supreme Court rulings, for driving up the pressure on premium levels, largely by encouraging attorneys to sue carriers. Rates did increase significantly immediately following those rulings.

Since then, however, premiums have declined — most recently in May.

“The favorable loss experience in policy years 2015 and 2016 has more than offset the combined cost increases that have emerged from those court decisions,” NCCI said.

Even so, “NCCI believes the Castellanos and Westphal decisions are now exerting upward pressure on system costs, and they will continue to influence Florida workers compensation insurance rates,” the company added.

“Policy year 2017 will be the first full policy year post-Castellanos; however, the full effects of that decision will not materialize for several years to come,” it said.

Bill Herrle, Florida director for the National Federation of Independent Business, conceded that the development could deflate efforts in the Legislature to rein in litigation.

“It obviously makes reform much more difficult,” Herrle said via email. But he was waiting to see what trend emerges once NCCI analyzes last year’s data.

“In the meantime, we’ll never say that declining rates is a bad thing,” Herrle said. “It’s a great thing.”

In a press release, the federation praised the development.

“Lower workers’ comp rates equals a direct reduction in small business owners’ expenses, which means big things for growth,” the release said.

“Small business owners are reporting record high levels of optimism, according to NFIB’s Small Business Optimism Index, and news like lower workers’ comp rates fuels their confidence.”

Michael Moline

Michael Moline is a former assistant managing editor of The National Law Journal and managing editor of the San Francisco Daily Journal. Previously, he reported on politics and the courts in Tallahassee for United Press International. He is a graduate of Florida State University, where he served as editor of the Florida Flambeau. His family’s roots in Jackson County date back many generations.


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