Florida Approves A Double Digit Workers' Compensation Rate Increase To Take Effect December 1, 2016

An October 5, 2016 Order from the Florida Office of Insurance Regulations (OIR) granted final approval for a statewide workers' compensation rate increase of 14.5 percent to take effect December 1, 2016.

On May 27, 2016, the National Council on Compensation Insurance ("NCCI") filed a Revised Workers' Compensation Rates and Rating Values for consideration and review by the OIR that sought an overall rate increase of 19.6 percent. In support, NCCI argued the increases were necessary to offset the projected impact of the Florida Supreme Court's recent decisions in Castellanos v. Next Door Company and Westphal v. City of St. Petersburg. In Castellanos, the Court found unconstitutional the mandatory schedule that determined attorney's fees on a sliding scale based on the amount of workers' compensation benefits obtained. The Court held that the provision that created an irrebuttable presumption that the fee an attorney receives is reasonable was in violation of due process under the Florida and United States Constitutions. Two months later, the Court created additional uncertainty in the workers' compensation insurance market when it held in Westphal that a 104-week statutory limitation on temporary total disability benefits denied injured workers' constitutional right to access courts. Based on its analysis, NCCI asserted that the combined impact of the Florida Supreme Court decisions could increase overall Florida workers' compensation system costs by 13.8 to 37.5 percent.

Originally, the NCCI proposed an increase of 17.1 percent. However, in an amended filing, the NCCI sought an increase of 19.6 percent on all new, renewal and outstanding...

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