Good News in Florida's WC Annual Report

Amid the general economic gloom nationwide, the Florida Office of Insurance Regulation (OIR) offered some welcome news. In its recently released annual report, which covers calendar year 2008, Florida’s OIR declared the state’s workers’ compensation market “competitive” and heralded the success of legislative reforms enacted in 2003. The entire report is available at //www.floir.com/pdf/WCAnnualRptCY2008.pdf.

The purpose of the mandated report, as dictated by Florida Statute 627.211, is “to aid the Legislature in determining whether changes to the workers’ compensation rating laws are warranted.” The study comes just weeks before Florida’s 2010 legislative session, which begins March 2 and is scheduled to adjourn May 7. The report contains — again, as dictated by statute — “an analysis of the availability and affordability of workers’ compensation coverage and whether the current market structure, conduct, and performance are conducive to competition, based upon economic analysis and tests.”

According to the OIR data, Florida’s 2008 workers’ compensation written premiums were $2.3 billion. Coverage was provided by 251 organizations from among the 411 eligible to write in that market; loss ratio was 52.9 percent, including loss adjustment expense. The largest market share by any one company was 13.0 percent and the largest 10 writers combined had a 45.8 percent market share. This disbursement of business led the report’s authors to conclude that, “Florida’s workers’ compensation insurance market contained a large number of independent firms, none of which had enough market share to individually exercise market control in an uncompetitive nature.”