When the National Council on Compensation Insurance rolled out its proposed 16.5 percent rate cut, it shattered the conventional wisdom that employers and carriers had already experienced the full impact of the 2003 reforms. After all, workers' comp rates had already fallen by roughly 40 percent since lawmakers signed off on the bill that was virtually handwritten by the industry. Now carriers are faced with an almost unimaginable scenario where rates will have been cut by more than half since 2003. The market's performance is something that other lines of insurance can only dream about, and it has even caught regulators by surprise.

Insurance Commissioner Kevin McCarty remarked at last year's rate filing hearing that resulted in a 15.7 percent rate cut that the workers' compensation system is performing beyond expectations. "At the time Governor Jeb Bush and the legislature finalized the landmark reforms to the workers' compensation system in 2003, I felt we would see substantial rate relief for Florida's employers," McCarty said. "However, the actual results we have experienced are nothing short of remarkable."

Why and How?