When lawmakers in 2003 enacted the first comprehensive set of workers' compensation reforms in a decade, the driving political force was the protest from employers who were up in arms over the lack of available and affordable coverage. Now, some two-and-a-half years later, there are strong signs that the legislative intent of the reforms are working, as employers are benefiting from a highly competitive market. Lower rates aside, a reduction in costs, and a stable regulatory environment, are proving to make Florida once again an attractive market (as witnessed by the addition of 16 new carriers into the state since 2004). Now, as further evidence of the market's successful rebound, the Office of Insurance Regulation has issued a new report that paints a picture of the market making gains both statewide and nationally, which presents the very real possibility that carriers may rack up their best numbers in years.

Background

Traditionally, lawmakers avoid enacting comprehensive legislative insurance reforms since they are inherently controversial and typically pit multiple special interest groups against each other. This is especially true in workers' comp, which has the distinction of being the most regulated line of insurance in the state. Therefore, lawmakers largely ignore problems in the marketplace until they become a main-street pocketbook issue. The run up to the 2003 reforms proved to be no exception to this legislative principle. Lawmakers were fully aware that the system desperately needed to be restructured prior to 2003. However, it was not until rates increased and carriers started canceling or nonrenewing policies — or even exiting the market altogether — that the public demand for coverage necessitated legislative action.