NCCI Recommends 5.4 Percent Rate Decrease for Florida


Boca Raton, FL ( - The National Council on Compensation Insurance (NCCI) yesterday filed a proposed -5.4% rate decrease with the Florida Office of Insurance Regulation, effective January 1, 2020. NCCI is a licensed rating organization authorized to make rate filings on behalf of workers' compensation insurance companies in Florida.

According to an overview issued by NCCI, the filing is based on experience data as of year-end 2018 from Policy Years 2016 and 2017, which show continued significant improvement in loss experience within the state.  NCCI says in the overview, “This is consistent with prior experience filings in Florida and in line with recent filings submitted by NCCI in other states.” This rate recommendation follows two prior reductions, -9.5% effective January 1, 2018 and -13.8% effective January 1, 2019.

NCCI notes in the overview that “90% of the data analyzed relates to policies that became effective after the Castellanos and Westphal decisions. NCCI believes the Castellanos and Westphal decisions are now exerting upward pressure on system costs, and they will continue to influence Florida workers compensation insurance rates.” NCCI does caution that “Policy Year 2017 is the first full policy year post-Castellanos; however, the full effects of that decision will still not materialize for several years to come as workers compensation insurance is a “long-tail” line that often involves a long period of time for claims to be resolved.“

The rate reduction will be welcome news to employers in the state, however some industry insiders project the continued rate decline will hamper any reform efforts that might be considered by the legislature. Rate reduction recommendations in other states, such as Missouri and Kansas, have been relatively small by comparison, leading some to believe the trend to lower rates is bottoming out. The Florida NCCI recommendation challenges that notion.

The proposed -5.4% rate reduction filing has been submitted to the Florida state insurance commissioner for review and approval.

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