Cautions Regulators That a 19.6% Rate Increase Could Harm Florida’s Job Growth Competitiveness
TALLAHASSEE, Fla. (August 16, 2016) – The Florida Chamber of Commerce today testified at the Office of Insurance Regulation’s (OIR) Workers’ Compensation Rate Increase Hearing and warned that a proposed 19.6 percent rate increase will impact Florida’s business friendly climate and harm Florida’s competitiveness.
Today’s hearing was prompted by a workers’ comp rate increase recommendation by the NCCI after the Florida Supreme Court threw out portions of Florida’s workers’ comp system in two separate cases. During the rate hearing, Mark Wilson, President and CEO of the Florida Chamber of Commerce said the pending workers’ comp rate increase will substantially impact injured workers and job creators throughout Florida.
In addition to the recommended 19.6 percent workers’ comp rate increase, NCCI estimates that the combined total statewide unfunded liability related to the high court’s rulings could potentially exceed $1 billion. The increased costs will be borne in large part by job creators.
“It’s a lucrative deal for personal injury trial lawyers, but a raw deal for injured workers who won’t gain a dime, and may even be out of work longer,” Wilson said during the insurance regulatory rate hearing. “Florida businesses care about their injured workers and want to make them whole. But now, thanks to the Supreme Court and plaintiff trial lawyers, its ok to collect fees nearly 50 times as much as the injured workers judgement.”
If OIR approves the 19.6 percent workers’ comp rate increase, it will be the highest rate in the Southeast. And as experts across the industry agree, this rate increase will likely only be the first of many attempts to further increase rates, and therefore put Florida back on the path toward having the highest workers’ comp rates in the United States.
The Florida Chamber’s Workers’ Comp Task Force has heard from businesses across Florida that have said increased rates could force them to choose between paying higher rates and hiring additional employees.
“It would prevent a company that has 150 workers from hiring one more,” according to Florida Chamber Workers’ Comp Task Force Co-Chair Debbie Harvey, President and Chief Operating Officer of Ron Jon Surf Shop. “What businesses are worried about is this is just the start. You could have another 15 percent later on top of a 19 percent increase. It’s a compound effect.”
“Look at all the small and medium-sized businesses and multiply that by 19.6 percent. If you do the math, that’s $714 million. That’s going to leave a mark on the economy,” Steve Knopik, Florida Chamber Workers’ Comp Task Force Co-Chair and CEO of Bealls Inc.
The Florida Chamber’s Workers’ Comp Task Force looks forward to working with the Office of Insurance Regulation, the Division of Workers’ Compensation, and the Florida Legislature on developing a remedy to the Supreme Court’s decision.