Senate Takes Steps Toward AOB Reform 

 

Consumer Protection Coalition

 

On January 22, the Senate Committee on Banking & Insurance met to discuss an Assignment of Benefits (AOB) reform bill that will help reign in AOB abuse — Senate Bill 122.

The Florida Chamber applauds Senator Doug Broxson for proposing SB 122 and the committee for engaging in bold dialogue and seeking meaningful insights from industry experts, including Florida Chief Financial Officer Jimmy Patronis, the Office of Insurance Regulation and Citizens Property Insurance. 

Meaningful reforms have failed to cross the finish line in past years and as a result, we have seen hardworking individuals continue to fall victim to shady contractors who have convinced them to sign away their rights— ultimately leaving them high and dry without recourse.

Consider that, in 2006, there were only 405 AOB-related lawsuits. Last year, the number skyrocketed to more than 34,000.

We cannot afford another year without AOB reform. 

Engage With Us

  1. Visit the Consumer Protection Coalition to see how you can fight fraud today.
  2. Connect with Florida’s new Governor, members of the Cabinet and the Florida Legislature during the Florida Chamber’s 2019 Legislative Fly-In and Global Florida Dinner.

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.

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.

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 Goes Into Effect

Total Costs Resulting From Court Rulings to Top $1.5 Billion

Today, December 1, 2016, workers’ compensation rates will increase by 14.5 percent for all new and renewal policies, an increase which equates essentially to a $1.5 billion transfer of wealth from Florida businesses to trial lawyers the Florida Chamber of Commerce said.

“Today, job creators across Florida are opening their doors and facing a $1.5 billion tab that is not about employee safety or protecting workers, but about increasing compensation for plaintiff trial lawyers,” said CAROLYN JOHNSON, Director of Business, Economic Development & Innovation Policy for the Florida Chamber of Commerce.

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 and the Office of Insurance Regulation did not follow the requirements of the “Sunshine Law.” This decision has since been appealed, meaning the rate increase will take effect today.

“Many businesses are telling us they will be forced to delay hiring, or even cut existing jobs, in order to cover this increase in their premiums,” said JOHNSON. “A rate like this puts Florida’s competitiveness and job creation directly at risk.”

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.

This $1.5 billion increase is the result of two Florida Supreme Court decisions earlier this year 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. And although the rate officially increases today, since the decision in April, the number of lawsuits and trial lawyer pay-days have already increased.

The Florida Chamber has a long history of helping to keep Florida’s workers’ comp system working. As a result, workers’ comp rates were 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.

In Case You Missed It:

 

Division of Workers’ Comp Wants Your Input on Rate Increase

$1.5 Billion Workers’ Comp Increase Takes Effect December 1

December 1, workers’ compensation rates will increase by 14.5 percent for all new and renewal policies, an increase which equates essentially to a $1.5 billion transfer of wealth from Florida businesses to trial lawyers. This is your chance to share with the Division of Workers’ Comp your thoughts on how to fix Florida’s current workers’ comp system. If the business community does not weigh in, plaintiff trial lawyers, not job creators, will inform the Division’s proposed recommendations. Please take a few minutes to provide your feedback. The survey closes Thursday, December 8, 2016.

Background:

This $1.5 billion increase is the result of two Florida Supreme Court decisions earlier this year declaring portions of Florida’s workers’ comp system unconstitutional. In one specific ruling, the Court said a plaintiff trial lawyer could receive $38,000 in attorney fees for a case in which the injured worker’s injuries totaled $800. That’s $800 for the injured worker and $38,000 for the trial lawyer and higher rates for everyone.

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 and the Office of Insurance Regulation did not follow the requirements of the “Sunshine Law.” This decision has since been appealed, allowing the rate increase to take effect today, as planned.

While a delay sounds like it would have been great for businesses, the reality was that a rate increase was looming on the horizon. As I told the media last week:

“This might sound like a victory, but Florida businesses shouldn’t be fooled by this classic trial lawyer tactic. The rates may not go up on December 1st, but this is only temporary. What won’t stop, however, is that trial lawyers will use this time to continue enjoying the benefit of unlimited legal fees in workers’ comp cases, while they are also seeking higher attorney fees for claims retroactively impacted as far back as July 2009. It’s a lucrative deal for billboard trial lawyers.”

Join the Florida Chamber Workers’ Comp Task Force:

The Florida Chamber remains committed to addressing the Supreme Court’s decision when the Florida Legislature convenes in March. The Florida Chamber Workers’ Comp Task Force has been working on this remedy, as well as educating businesses on this rate increase.

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.

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AOB Fraud Forces Policy Changes at Citizens Property

In Florida, there’s a rapidly growing scam in which shady home repair vendors pressure homeowners to sign away the rights and benefits of their insurance policies as a condition of performing work. This practice has led to grossly inflated claims and an explosion of Assignment of Benefit lawsuits against insurers, which is driving up the cost of homeowners’ coverage for consumers.

As a result, Citizens Property Insurance, the state’s largest government insurer, recently announced policy changes that will impact the handling of claims – especially claims for emergency repairs. These changes, which will take effect on or after July 1, 2016 for new or renewed policies, are designed to help curb AOB fraud and abuse.

Policy Changes Include:

  • The policyholder must take emergency measures to prevent further damage, and the policy includes only what is reasonable and necessary up to $3,000 or 1 percent of their coverage limit, unless Citizens approves additional measures.
  • Citizens can inspect and adjust the claim. Permanent repairs cannot take place until 72 hours after
  • Citizens has been notified, or the loss is inspected by Citizens, or verbal or written approval is given by Citizens property insurance.
  • These policy changes have only been approved for Citizens Property Insurance by the Office of Insurance Regulation. However, we anticipate other insurers soon might follow suit.

The Florida Chamber of Commerce and its Consumer Protection Coalition continue to fight for solutions to AOB fraud and abuse – particularly addressing one-way attorney fee provisions.

Join our efforts by signing this petition, and stay tuned for additional updates as we continue pushing back against billboard trial lawyers.

Workers’ Comp Rates Drop Average of 4.7 Percent for 2016

The Office of Insurance Regulation (OIR) today approved an average overall rate level decrease of 4.7 percent on workers’ compensation insurance, effective January 1, 2016. This marks the second year in a row that workers’ comp rates have decreased and rates have dropped nearly 60 percent over the last decade, thanks to the work of the Florida Chamber and the business community.

What You Need To Know About Workers’ Comp

While Florida’s workers’ comp rates are moving in the right direction, three pending cases before the Florida Supreme Court could increase workers’ comp rates significantly depending on the decision. Below, we have the Florida Chamber’s latest information on workers’ comp.

Lend your voice- sign our resolution by contacting gblose@flchamber.com.