Not So Fast – Work Comp Rate Increase Back On
November 30, 2016
As you will recall from our update earlier this week, a Florida Circuit Court judge blocked the 14.5% increase in Florida workers’ compensation rates from taking effect on December 1st citing the process used to enact the increase was in violation of Florida’s Sunshine Laws. As expected, the Office of Insurance Regulation (OIR) filed an appeal yesterday (November 29th) and was successful in obtaining a stay on the ruling, meaning the increase will go into effect this week. As a reminder, this increase is only for new and renewal policies effective December 1st and later and will not be pro rata.
Overall, the rate increase was not good news for employers, but due to the Supreme Court decisions this year, insurance carriers are faced with the prospect of increasing Workers’ Compensation costs without the additional premium to counter the anticipated higher claims costs.
The current stay will remain in effect until the appellate court makes a decision on whether or not the lower courts “Sunshine Law” ruling is valid. If the appellate court agrees with the lower courts ruling, we anticipate that insurers will decrease standard premium reductions, dividends etc. and also be more aggressive in pursuing “consent to rate” agreements.
Confusion and uncertainty is rarely a “good thing” in the risk management and insurance industry and we recognize that this is a very fluid period for Florida Employers. We will continue to keep you updated in the future and please do not hesitate to reach out to us with any questions or concerns.
If you would like to learn more regarding this topic, please reach out to your BKS Advisor at Baldwin Krystyn Sherman Partners at 813.984.3200.