"As a reminder, the Florida Office of Insurance Regulation (OIR) has approved an overall statewide average increase for Florida's workers' compensation rates of +14.5%. The rate increase will apply to new and renewal policies starting December 1 st. There is no rate change to existing policies.
NCCI made an initial rate request of +19.6% in July in response to two Florida Supreme Court cases affecting the workers' compensation law: the Castellanos decision invalidated the statutory cap on fees paid to attorneys representing injured workers and the Westphal decision increased benefits for workers receiving temporary total benefits.
The +14.5% rate increase is the statewide average; individual class codes may increase more or less than this amount.
This rate increase is a bit unusual in that it is "off-cycle;" usually, rate changes take effect on January 1st. This has led some policyholders to ask their agents if they can postpone the rate increase by cancelling their existing policy and re-writing another one that starts before the rate increase. The short answer is "no." In Florida, workers' compensation policies cannot be cancelled and then re-written in order to take advantage of a change in the rates. As policies renew, they will have the rate increase applied to their policy according to their renewal date (or Anniversary Rating Date, if different than the policy effective date)."
Can you rewrite an existing policy on November 30 and save the increase?
Under the Anniversary Rating Date (ARD) rule in the National Council on Compensation Insurance's Basic Manual, a carrier issuing a workers' compensation policy in Florida must apply the rules, class codes and rates that are in effect as of the ARD of the policy for the full one-year term of the policy. This means that an existing policy with a renewal date and ARD of June 1, 2016, will not have the 14.5% rate increase applied to it until June 1, 2017. If the policyholder cancels this policy and re-writes it with a new effective date of November 30, 2016, that policy keeps its ARD of June 1st and will still have the higher rates charged when it renews on June 1, 2017.
Because the ARD rule is confusing and often the ARD is the same as the policy's renewal date, NCCI has received approval from the Florida Office of Insurance Regulation to repeal it in May of 2017. Until then, however, the ARD rule governs how the December 1 st rate increase will be applied to Florida workers' compensation policies."
If you have any questions about Workers Compensation, or want to get a quote on a Workers Comp policy, please contact us here.
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