Florida Office of Insurance Regulation Considers Workers’ Compensation Excessive Profit Rule, Form OIR-B1-15 Changes

Yesterday, November 17, 2010, the Florida Office of Insurance Regulation (“OIR”), held a Rule Development Workshop on proposed Rule 69O-189.007, entitled “Insurer Experience Reporting- Excessive Profits, Workers’ Compensation Insurance.” 

OIR Actuary Jim Watford and OIR Attorney Bob Prentiss presided over the Workshop. 

The proposed Rule incorporates changes to Form OIR-B1-15, which is also known as the Workers’ Compensation Excessive Profits Reporting Form F (“Form”).  A copy of the proposed Rule and Form are attached for review.

Mr. Watford opened the meeting by recognizing interested parties for comments, many of which focused on the treatment of certain reported expenses. 

For example, a “debt expense” is an allowable expense that should be allocated in the “other expenses (E)” category, but that is not included in expenses (A) through (D) on Page One of the Form. 

Practically, any expense not included in (A) through (D) would fit in the (E) column.  However, in his response to public comment on the matter, Mr. Watford did not seem amenable to accepting federal income taxes as an allowable expense on the Form and noted that companies can deduct that expense. 

Others who provided public comment questioned the necessity of the proposed changes.  Mr. Watford indicated these changes are being implemented in response to FFVA Mutual Insurance Companies’ challenge regarding OIR’s process for determining eligible expenses in excess profits calculations. 

He also noted that, even though workers’ compensation insurers have realized increased profits since Florida’s related 2003 statutory changes, the Form has not been updated in several years. 

The record will remain open for additional written comments until 5:00 p.m. on November 24, 2010. 

Should you have any comments or questions, please contact Colodny Fass.