Ratemaking Challenges in Today’s Atypical Workers’ Compensation Environment

By Brett Foster

At NCCI’s Annual Issues Symposium 2019, a video shown on the underwriting market cycle discussed the ebbs and flows of the workers compensation industry and how the market has changed since the 1990s.

Soft market typically refers to periods when coverage is widely available and insurance companies lower prices to actively compete for market share. During a soft market, industry reserve deficiencies may build as companies release reserves to offset increasing underwriting losses. On the other hand, hard market generally describes periods of relatively higher prices, tightening underwriting standards, and reserve strengthening.

Today’s workers compensation environment is healthy and competitive. However, industry stakeholders have described the current market as atypical, displaying a hybrid of both SOFT-market and HARD-market characteristics.

CLICK HERE to read the complete NCCI article.

NCCI Seeks to Decrease Workers’ Compensation Rates

Florida Record, September 16, 2019

TALLAHASSEE — The National Council on Compensation Insurance (NCCI) has filed a proposed rate drop for workers’ compensation rates with the Florida Office of Insurance Regulation for the third year in a row.

Florida Chamber of Commerce director of business, economic development and innovation policy Carolyn Johnson, however, said a number of factors are preventing further rate decreases.

“While workers’ comp rates will decrease for now, NCCI has made it clear that Florida Supreme Court decisions are exerting upward pressure on system costs. Workers’ comp carriers are experiencing increases in attorney fees, litigated claims are taking longer and generally costing more,” Johnson said in a statement provided to The Florida Record.

“These factors have reduced the potential further rate decrease that could have been provided to job creators.” 

Click here to read the entire article in the Florida Record.

Lawmakers Take Steps to Lower the Cost of Doing Business in Florida

On April 16, two Florida Chamber-backed targeted tax reform bills passed through the House and Senate— HB 7123 and SB 1112. Carolyn Johnson, Director of Business, Economic Development and Innovation Policy provides us with an update on the two tax packages and what they mean for Florida’s job creators.

HB 7123 will now move to the House floor, while SB 1112 has one more committee stop before moving to the floor.

Thank you to bill sponsors Representative Bryan Avila and Senator Joe Gruters for continuing to take the necessary steps to lower the cost of doing business.

We will keep you up-to-date as these bills move forward.

Get Involved

1. ICYMI from Florida Politics: Senate bill to make internet marketplaces all pay sales taxes passes panel.

2. Sign the petition today to create a more competitive and equitable tax system in Florida.

Florida Chamber Bottom Line: NCCI Is Leading the Way in Florida Worker’s Compensation Marketplace

In the latest Florida Chamber Bottom Line, Dawn Ingham, State Relations Executive for the National Council on Compensation Insurance (NCCI) discusses NCCI’s role in Florida’s workers’ compensation marketplace and the trends affecting this system.

“We’re seeing some positive trends affecting Florida’ workers compensation marketplace. Employment growth and wage growth here in Florida are higher than the national average,” Ingham said.

Making Florida More Competitive

Join business leaders, industry experts, elected officials and community leaders for the Florida Chamber’s Insurance Summit, and hear from and network with industry leaders on the important issues facing insurers, business leaders and consumers. Click here to be the first to know when registration opens.

Workers’ Comp Rates Decrease by 13.8 Percent

Automation and Employers’ Efforts to Create Safer Workplaces Produce Short-Term Rate Reduction, but Increased Attorney Fees Poised to Have Greater Impact on Future Rates

On Friday, November 9, 2018, the Office of Insurance Regulation (OIR) approved an average 13.8 percent decrease in workers’ comp rates to take effect January 1, 2019 for new and renewal policies. This is based on the National Council on Compensation Insurance’s (NCCI) filing for a 13.4 percent decrease to OIR at the end of August, 2018. When making its filing, NCCI pointed to improved loss experience as the reason for the decrease. More information and an analysis of NCCI’s August filing can be found here.

In a statement, Florida’s Chief Financial Officer Jimmy Patronis said:

“A workers’ compensation insurance decrease of 13.8 percent amounts to almost a half billion dollars in savings for Florida’s business community who support local economies, employ our neighbors, and give back to our communities. We must continue to do all we can to support and fuel Florida businesses, the backbone of our economy. While today’s news is good news, we must keep a close watch on Florida’s workers’ compensation insurance market so that we don’t go back to the time of skyrocketing rates.”

The Florida Chamber will continue to advise businesses on the impact of rising attorney fees and other cost drivers to the system. Friday’s rate decrease is good news for Florida job creators, but employers should be prepared for potential rate increases on the horizon as attorney fees continue to exert pressure on the workers’ comp system. As more time passes following the Castellanos decision in April 2016, these increased costs will be included in future experience rate filings.

Does Florida’s Workers’ Comp System Work For You?

Join us in advance of the 2019 Legislative Session to discuss workers’ comp and other issues important to Florida’s job creators by registering for the 2019 Florida Chamber of Commerce Legislative Fly-In on February 19-21, 2019.

Workers’ Comp Rates Decrease 1.8 Percent Next Month


Join the Workers’ Comp Task Force      Learn More About Workers’ Comp


On May 1, the Florida Office of Insurance Regulation approved a law-only filing that decreases workers’ comp rates by 1.8 percent, effective June 1, 2018.  This decrease is the result of the federal tax cut package signed into law at the end of last year, the Tax Cuts and Jobs Act, which produced an increase to many carriers’ profit and contingency margins. In response, the National Council on Compensation Insurance filed a corresponding rate decrease to offset the increases to insurance carriers.

What This Means for You

As a result of federal tax reform, job creators will experience lowered costs of doing business in the form of needed workers’ comp rate relief. However, this relief may only be temporary. The result is modest, albeit temporary, rate relief for businesses across the state of Florida.

It is expected that the National Council on Compensation Insurance will file its annual experience filing in late summer, and rate increases could be on the horizon.  The fact remains that while businesses across the state have continued to become safer and the severity of claims have decreased, attorney fees remain a cost driver in Florida’s workers’ comp system.  Recent data by the Office of Judges of Compensation Claims show that attorney fees increased by 36 percent over the previous year, and hourly attorney fees have jumped by 200 percent.

The experience rate filing expected in late summer will start to reflect some of this new data as a result of the Florida Supreme Court’s 2016 decision in Castellanos v. Next Door Company.

Join the Task Force

We need your help in pushing legislators to enact meaningful and comprehensive workers’ comp reform by addressing skyrocketing attorney fees. Join the Florida Chamber of Commerce’s Workers’ Compensation Task Force by contacting Carolyn Johnson at (850) 521-1235 or cjohnson@flchamber.com.

Despite Rate Decrease, Workers’ Comp Reform Should Be Top of Mind for Lawmakers


This August, the National Council on Compensation Insurance (NCCI) recommended an average Florida workers’ comp premium decrease of 9.6 percent effective January 1, 2018. This comes following two landmark Florida Supreme Court cases that brought uncertainty to the state’s workers’ compensation system and in turn raised rates by 14.5 percent in 2017.

While the 9.6 percent rate decrease is welcome and business owners should be relieved, the problem still persists.

NCCI recommended a decrease, not because of any reform or changes, but because it is using claims data from 2014 and 2015.

Unfortunately, too many groups are laying down the sword despite Florida having among the highest workers’ compensation rates in the Southeast, with rising rates leading to a $1.5 billion cost shift for Florida businesses. Various organizations and associations have openly proclaimed that the fight for reform is unlikely this year.

The truth is that business owners will soon experience sticker shock after their workers comp rates skyrocket again and they will be knocking at their lawmaker’s door, asking “Why didn’t you do something about this?”

Florida was once hailed as a leader on workers’ comp reform but our current workers’ compensation system is unsustainable for the state. Fees and claims will continue to rise, hampering Florida’s business climate and causing our 46th ranked legal system to fall even further.

A competitive and predictable workers’ compensation system that protects workers and job creators is vital to making Florida more competitive. Lawmakers should consider the long-term ramifications for the future of the state if they fail on reform this session. Hopefully, it will spark the urge to fix our broken workers’ compensation system.

Authored by Carol Roberts, President & CEO of Bay County Chamber of Commerce

Tentative Workers’ Comp Rate Proposal Announced

On August 28, 2017, the National Council on Compensation Insurance (NCCI) recommended a 9.6 percent workers’ comp rate decrease to Florida’s Office of Insurance Regulation, effective January 1, 2018. If approved, this decrease is temporary relief for Florida job creators who faced a 14.5 percent increase that took effect earlier this year.

While we are still reviewing the specifics of the rate proposal, of particular interest to job creators is the decision by NCCI to only utilize 2014 and 2015 claims data for this rate proposal. This means that claims from 2016, which were not subject to trial attorney fee caps overturned by the court in last April’s Castellanos decision, are largely not included in the rate proposal.

In April 2016, Florida’s activist Supreme Court ruled against small businesses and injured workers and in favor of trial lawyers in Castellanos. By throwing out Florida’s attorney fee structure, the cost of lawsuits have increased significantly, and in some instances, trial lawyers are receiving attorney fees as high as $400 an hour.

During the 2017 session, the Florida Legislature failed to pass meaningful workers’ comp reform, despite the $1.5 billion cost this rate increase had on job creators, their employees and customers. The Florida Chamber’s Workers’ Comp Task Force has been working over the summer to improve upon last year’s legislation in the hopes of getting the Legislature to act in 2018. Unfortunately for businesses, until the Legislature passes reforms, costs can continue to increase. And while a rate decrease would be great news for businesses, it doesn’t make the chances of meaningful workers’ comp reform next session more favorable.

This rate still must be approved by the Office of Insurance Regulation. The Florida Chamber will continue to keep you informed of ongoing ratemaking process and legislative action.

Here Are Two of the Ways You Can Make Your Voice Heard

With No Legislative Fix In Sight, Court Reinstates Workers’ Comp Rate Increase

First District Court of Appeals Officially Reinstates 14.5 Percent Increase

Just one day after lawmakers closed out the 2017 Legislative Session without fixing Florida’s broken workers’ compensation system, the First District Court of Appeals (DCA) today issued a ruling reversing a lower court’s ruling and officially reinstated the 14.5 workers’ comp rate increase  which originally took effect December of 2016.

The DCA made its ruling on the National Council on Compensation Insurance (NCCI) and Office of Insurance Regulation (OIR) v. James Fee case. Fee is a workers’ comp trial attorney. Fee filed a lawsuit against NCCI and OIR arguing that they violated the Sunshine Law while determining the rate increase associated with two Florida Supreme Court rulings. Days before the rate increase was to take effect, the Leon Circuit Court invalidated the 14.5 percent workers’ comp increase under the grounds that the Sunshine Law had been violated. After the case was appealed to the First DCA, a stay was issued, allowing the rate increase to take effect. The First DCA found that NCCI and OIR complied with the multiple elements of the Sunshine Law and that the rate increase should take effect.

Unfortunately, this decision comes the day after the Florida Legislature concluded the 2017 Legislative Session without taking steps to protect job creators from this rate increase. Throughout session, NCCI and Florida’s workers’ comp ratemaking process were consistently under attack by the trial bar.

The Florida Chamber of Commerce fiercely advocated for a fix to Florida’s broken workers’ comp system, and believe that this case was designed to serve as a distraction from the real issue at hand – resolving the Florida Supreme Court decision that led to the 14.5 percent – or $1.5 billion – workers’ comp rate increase in the first place.


Join the Florida Chamber’s Workers’ Comp Task Force

Support our efforts to help make workers’ comp rates affordable for job creators. Join the Florida Chamber Workers’ Compensation Task Force.

Urge Senators to Pass House Workers’ Comp Bill

Workers’ compensation rate increases are negatively affecting businesses throughout Florida. That’s why the Florida Chamber is supporting workers’ compensation reforms that will help injured workers get the care they need to get healthy and return to work as quickly as possible, and reduce rates driven by unnecessary litigation.

The Florida Senate will consider important reforms May 2 and May 3, which is why we need you to contact Senators immediately and urge them to support the House version of the workers’ comp bill.

The Senate version of the workers’ comp bill, SB 1582, does not go far enough in reducing rates after the $1.5 billion rate increase that took effect in December. In fact, NCCI estimates that the Senate bill will only result in a 0-3 percent savings.

The Florida Chamber supports the House version of the workers’ comp bill, HB 7085, and we need your help in urging Senators to do the same.

Take Action Now:

Urge Senators to support the House workers’ comp bill.

Florida Chamber Calls on Florida Senate to Help Fix Pending Workers’ Comp Crisis

The Florida Chamber of Commerce today testified for a legislative fix to Florida’s workers’ compensation crisis during today’s Florida Senate Banking & Insurance Committee meeting.

“A $1.5 billion tab that is not about employee safety or protecting workers, but about increasing compensation for plaintiff trial lawyers is harmful to Florida’s competitiveness,” said CAROLYN JOHNSON, Director of Business, Economic Development & Innovation Policy for the Florida Chamber of Commerce. “The Florida Chamber’s Workers’ Comp Task Force believes that a legislative solution should include tying attorney fees to the amount of benefits secured for the injured worker.”

Florida’s employers are now having to foot a $1.5 billion workers’ comp bill as the result of two overreaching Florida Supreme Court decisions earlier this year declaring portions of Florida’s workers’ comp system unconstitutional.

“We support legislative efforts to normalize rates… to prevent future spikes so our businesses can plan for their future,” said TODD THOMSON, Vice President of Public Affairs, Greater Pensacola Chamber of Commerce during his testimony.

According to research from a Florida Chamber Workers’ Compensation Task Force survey, of the businesses impacted by the rate increase, 90 percent said the impact is significant. An overwhelming 96 percent of those surveyed believe that the Florida Legislature should take action to remedy the Supreme Court decisions that resulted in a 14.5 percent increase.

Prior to the Thanksgiving holiday, a Leon Circuit Court judge voided the 14.5 percent rate increase under the grounds that the National Council on Compensation Insurance (NCCI) and the Office of Insurance Regulation (OIR) did not follow the requirements of the “Sunshine Law.” This decision has since been appealed, meaning the rate increase took effect on December 1, as planned. Yesterday evening, the First District Court of Appeals ruled that the 14.5 percent rate increase, which equates to $1.5 billion, will continue to be in effect while the OIR and NCCI appeal a case from the Leon Circuit Court last month.

“Many businesses are telling us that a $1.5 billion increase means they will be forced to raise prices, reduce benefits, delay hiring, or even cut existing jobs, in order to cover this increase in their premiums,” said JOHNSON. “The Florida Chamber has led the charge to lower rates more than 60 percent in the last 13 years and has helped injured workers return to work 10 days faster- we will not be distracted by trial lawyer tactics and will continue to advocate for a legislative remedy to this issue.”


Did You Know the Florida Chamber’s Workers’ Comp Task Force is Working on a Solution to the $1.5 Billion Increase?

Learn more about the Florida Chamber’s Workers’ Comp Task Force and its work on a legislative solution to the $1.5 billion increase to Florida’s business community.

Workers’ Comp Rate Increase to Stay in Effect During Appeal

Yesterday evening, the First District Court of Appeals ruled that the 14.5 percent rate increase will continue to be in effect while the Office of Insurance Regulation (OIR) and National Council on Compensation Insurance (NCCI) appeal a case from the Leon Circuit Court last month. This case, brought forward by a trial lawyer, argued that the rate-making process violated Florida’s Sunshine Law. The DCA also granted NCCI’s motion to expedite the case, and set the following timeline:

  • January 11, 2017
    OIR and NCCI must file arguments on the merits of the case
  • January 23, 2017
    James Fee, the trial attorney who brought forward the case, must respond to OIR and NCCI’s filing, and
  • February 2, 2017
    Final briefs must be filed.

What This Means for Florida Businesses:

The Leon Circuit Court in its decision invalidated the rate increase, but the District Court of Appeals allowed the rate to take effect on December 1 for all new and renewal policies. This case is a red herring, meant to distract from the real problem- increased attorney fees as a result of the Castellanos v. Next Door Company Florida Supreme Court decision. In fact, claimant attorney fees are up over 20 percent since the Supreme Court’s decision in April.


What’s Next:

Today, the Florida Chamber will testify before the Florida Senate’s Banking & Insurance Committee to fight for a workers’ comp system that works. Share your story with us by contacting cjohnson@flchamber.com today.

Learn how the Florida Chamber of Commerce Workers’ Comp Task Force is working on a legislative solution to the $1.5 billion increase to Florida’s business community.

Workers’ Comp Rate Finalized and Total Costs Resulting From Court Rulings to Top $1.5 Billion

Tallahassee, Fla. (Oct. 4, 2016) – A workers’ compensation rate increase finalized today will top more than $1.5 billion, and force Florida job creators to pay higher premiums designed to  benefit billboard trial lawyers – not injured workers, the Florida Chamber of Commerce said.

The National Council on Compensation Insurance (NCCI) today accepted the Florida Office of Insurance Regulation’s recommended 14.5 percent workers’ comp rate increase, and took necessary steps to begin assessing the increased rates on December 1 for new and renewal policies.

“Job creators across Florida will now be forced to pick up a $1.5 billion tab that, disturbingly is not about employee safety or protecting workers – it’s about increasing compensation for plaintiff trial lawyers,” said MARK WILSON, President and CEO of the Florida Chamber of Commerce.

“A rate increase this big, this sudden, hurts Florida’s competitiveness and employers large and small. Many businesses will be forced to delay hiring – or even cut existing staff – to cover this leap in their workers’ comp premiums,” WILSON added.

ICYMI: Let’s fix workers’ comp in Florida. (Tampa Bay Times, September 30, 2016)

The 14.5 percent workers’ comp rate increase follows two Florida Supreme Court decisions declaring portions of Florida’s workers’ comp system unconstitutional. In one case in particular, the plaintiff argued that the plaintiff trial lawyer should receive $38,000 in attorney fees for a case in which the injured worker was awarded only $800. That’s $800 for the injured worker and $38,000 for the trial lawyer. This accounts for nearly two-thirds of the rate increase.

Last week during the Florida Chamber’s Future of Florida Forum, Senator Bill Galvano and Representative Kathleen Passidomo discussed this issue with Florida Chamber Workers’ Comp Task Force Co-Chair Steve Knopik, CEO of Bealls, on the Florida Chamber’s Bottom Line.

“It’s important that we educate the new members in the legislature who maybe didn’t live through those reforms (2003 reforms) at that time, make sure that the voice of the Florida Chamber is heard in those deliberations and make sure you understand who the decision makers are in that process,” said SENATOR GALVANO.

“I think it’s important that we hit it early on, look at it globally, make the change that needs to be made, and it’s not redoing the entire statute, but addressing the Supreme Court’s rulings and do it as soon as possible,” said REPRESENTATIVE PASSIDOMO.

The Florida Chamber has a long history of helping to keep Florida’s workers’ comp system working. As a result, workers’ comp rates lowered by more than 60 percent in the last 13 years, and injured workers returned to work 10 days faster. Those efforts continue today with the Florida Chamber’s Workers’ Compensation Task Force which is working to secure a legislative fix.


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Florida Chamber of Commerce Testifies in Support of Job Creators and Injured Workers During Workers’ Comp Rate Increase Hearing

Cautions Regulators That a 19.6% Rate Increase Could Harm Florida’s Job Growth Competitiveness

> READ Mark Wilson’s Testimony

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.


17.1% Workers’ Comp Rate Increase Will Harm Florida’s Economy/Job Growth

Florida Chamber of Commerce Urges State Leaders to Put Small Businesses and Injured Workers Ahead of Personal Injury Trial Lawyers


TALLAHASSEE, FL (May 27, 2016) – With job creators facing a 17.1 percent workers’ compensation rate increase, the Florida Chamber of Commerce today encourages the Florida Legislature to put small businesses and injured workers before personal injury trial lawyers through whatever means necessary.

The recommended 17.1 percent workers’ comp rate increase, announced earlier today by the National Council on Compensation Insurance (NCCI,) the industry’s provider of workers’ comp analysis and rates, primarily results from a recent Florida Supreme Court ruling that deemed Florida’s attorney fee provision unconstitutional.

The high court’s April 28th action threw out Florida’s attorney fee structure which was originally established in 2003. The 2003 reforms were put in place to help stabilize out-of-control workers’ comp rates which at the time were the highest in the country, and during the last 13 years have helped lower rates nearly 60 percent.

By putting job creators and injured workers first, lawmakers can help prevent businesses from being forced to pay higher rates, and avoid harming Florida’s growing economy and private-sector job growth. With Florida small businesses creating two of every three jobs, this is particularly important and can help prevent employers from choosing between hiring a new worker or paying increased workers’ comp rates.

“We’ve led efforts for more than 10 years to help lower workers’ comp rates by almost 60 percent, and now that personal injury trial lawyers and an activist court are forcing rates to likely skyrocket, we’re not about to back down,” said Mark Wilson, President and CEO of the Florida Chamber of Commerce. “The Florida Chamber will lead the charge to ensure small businesses aren’t crushed under the weight of increased workers’ comp rates, and that workers’ have access to quality healthcare so they can return quickly back to work.”

The Florida Chamber is actively leading the charge to keep workers’ comp working. In fact, the Florida Chamber’s Workers’ Comp Task Force is preparing a legislative remedy, and is coordinating with the best legal minds, along with communicating with legislative and executive leadership.

The Florida Chamber looks forward to continuing to work with Governor Rick Scott and the Florida Legislature to craft a solution to the Florida Supreme Court’s ill-advised and overreaching attempt to legislate from the bench.

The NCCI rate increase recommendation would take effect August 1, 2016 following approval by the Florida Office of Insurance Regulation.



The Florida Chamber of Commerce is the voice of business and the state’s largest federation of employers, chambers of commerce and associations, aggressively representing small and large businesses from every industry and every region. The Florida Chamber works within all branches of government to affect those changes set forth in the annual Florida Business Agenda, and which are seen as critical to secure Florida’s future. The Florida Chamber works closely with its Political Operations and the Florida Chamber Foundation. Visit www.FloridaChamber.com for more information.