It counters the increases in the liability policies
Tampa, FL (PRWEB) January 28, 2008
On New Year's Eve, the Florida Office of Insurance Regulation released its annual report on the state of the market for workers' compensation insurance to the Florida Legislature.
The report detailed the availability and affordability of coverage for workers' compensation insurance in Florida for calendar year 2006. In conclusion, they found that Florida is the largest market dominated by private market insurers (as compared to state sponsored residual market entities such as those in New York and California).
Most importantly, the Florida Office of Insurance Regulation approved an overall rate reduction of 18.4 percent, effective Jan. 1, 2008, marking the fifth consecutive year of workers' compensation rate decreases. This rate reduction will give Florida businesses a cumulative decrease of 51.4 percent since legislative reforms were enacted in 2003.
These decreases can be attributed to a law passed by the state Legislature four years ago. It capped attorney's fees at $1,500 and tightened loopholes that allowed contract employees to collect claims despite not being covered by a workers' comp insurance policy, says Laura Cosgrove of Eidson Insurance in Orlando. Last year, the council recommended Florida's insurance office slash the 2007 rate by 13.5 percent. The state did that and more, eventually approving a 15.7 percent cut.
Other trends were also highlighted in the Florida's workers' compensation market: Overall workers' compensation claim frequency is on the decline, which helps offset any increases in claim severity costs. The decrease in the number of claims helps reduce rates. However, warns Cosgrove, don't expect double-digit rate reductions to continue each year: "Some of the fees are getting so low that it's not covering the administrative costs."
Bob Parsell, who owns three Ace Hardware stores in Seminole County, says although his rates aren't as high as those for construction firms, he appreciates the rate cut. "It counters the increases in the liability policies," Parsell says.
Florida also welcomed five new workers' compensation writers in 2006; the five companies are domiciled in Florida, Delaware, Iowa, New York and Wisconsin. Jeffrey Kaplan, President of Insurance Source.Com Inc announced the appointment of Michigan Construction Industry Mutual (MCIM) as a provider of workers' compensation insurance for businesses in the construction and manufacturing industries.