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Workers Comp Market a Boom For Carriers and Employers

Three years ago Governor Jeb Bush signed off on a comprehensive workers' compensation reform bill that lawmakers, regulators, and the insurance industry promised would reduce system costs while

By Michael H. Adams | Updated on September 30, 2006

Three years ago Governor Jeb Bush signed off on a comprehensive workers’ compensation reform bill that lawmakers, regulators, and the insurance industry promised would reduce system costs while stimulating the market by lowering employers’ premiums. Now the latest evidence that the reforms are working as intended appears overwhelming, as the National Council on Compensation Insurance recently submitted a rate filing to regulators calling for a statewide average 13.3 percent rate cut. NCCI’s proposed rate cut is the fourth consecutive call for lower rates since the passage of the 2003 reforms and, if approved as filed, means that come next year employers will see a savings of $400 million and a cumulative rate reduction of 38.9 percent.

The proposed rate decrease represents one of the rare pieces of good news to come out of the Office of Insurance Regulation this year as regulators have had little choice but to approve double-digit homeowners’ premiums and watch on as policyholders face more out-of-pocket expenses as entities like Citizens Property Insurance Corporation levy assessments to pay off past debts. Alluding to the financial stress placed on businesses after the state sustained losses from eight storms in two hurricane seasons, regulators noted that this year’s workers’ compensation rate filing is particularly welcomed by employers. Not only will it help offset rising property premiums, it will help offset the financial strain felt by many employers who now have to reach into their pockets to pay repairs due to hurricane damage.

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