The National Council on Compensation Insurance (NCCI) has recommended an overall workers’ compensation rate level increase of 6.1 percent for Florida. If approved by the Florida Office of Insurance Regulation (OIR), the increase would be effective Jan. 1, 2013.
In making its recommendation, NCCI noted that there has been a small deterioration (1.9 percent) in recent loss experience. Additionally, following several years of significant declines, claim frequency increased by an average of 4.5 percent per year in 2009 and 2010; the average indemnity cost per case in excess of wage growth has been relatively flat since 2006; and the average medical cost per case in excess of wage growth has increased since 2006.
NCCI further noted that the significant experience improvements that occurred after the 2003 reform have ended, and that the system is operating from a new baseline reflecting the total cumulative effects of the reform. After the reform, the average loss cost went from $2.62 per $100 payroll to a low of $1.00 per $100 payroll.
The cumulative impact of the rate decreases after the 2003 reform was -64.7 percent; the last decrease took effect July 1, 2010. The OIR approved a rate increase of 7.8 percent for January 2011 and 8.9 percent in January 2012.
Assuming this proposed increase of 6.1 percent is approved as filed, the average loss cost would be $1.14 per $100 payroll which is just below the average ($1.15 per $100 payroll) for states in the Southeast (North Carolina, South Carolina, Tennessee, Georgia, Alabama, and Florida).
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