She said the department has 90 days to review the annual rate filing for the voluntary insurance market.

Last year the NCCI recommended an 8 percent boost, Ms. Torres said, and the department instead approved a 2 percent increase--a decision that was appealed to an administrative judge, who concurred with the department's action.

After further discussion with NCCI, Ms. Torres said regulators agreed to a 2.7 percent increase that became effective at the beginning of this month. The latest proposal would be effective Jan. 1, 2003.

NCCI, based in Boca Raton, Fla., said the primary components driving this requested rate change are accident experience benefits of plus-7.6 percent, and a profit and contingency factor of plus-10.1 percent.

The loss experience, trend and benefits component results from a combination of deteriorating experience, trends showing increasing costs in Florida and countrywide, and a medical benefit increase.

The medical component amounts to 0.9 percent and recognizes the state's updated physician fee schedule, which took effect in July 7.

The profit and contingency component, NCCI said, has increased primarily due to changing financial market conditions and the need to account for policyholder dividends in determining adequate workers' comp rates. The current profit and contingency factor has not changed in six years despite varying financial market conditions, NCCI noted.

NCCI said that during 2001 alone, the Federal Reserve reduced short-term interest rates 11 times, and there has been a sharp decline in stock prices. "Both of these developments have significantly reduced investment income opportunities for insurers," NCCI said in a statement.