Florida Workers’ Compensation Joint Underwriting Association Board of Governors Meeting Report: October 26

The Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Board of Governors (“Board”) met on Monday, October 26, 2009 and heard reports from its various Committees, which are summarized below as follows:

 

Legislative Update

Increasing workers’ compensation benefits in select areas and utilization of loss costs and loss-cost multipliers in ratemaking were identified in the legislative update as issues that would likely be addressed during Florida’s 2010 Regular Legislative Session.

 

FWCJUA Bylaws

The FWCJUA is awaiting Florida Office of Insurance Regulation (“OIR”) approval on its filing of the Eighth Amended Bylaws.

 

Operations Committee Report

Because the FWCJUA’s volume of premiums has decreased, it is anticipated that some FWCJUA employees may be laid off at the end of 2009.  It has been determined that a separation agreement is needed for the affected employees.  The proposed agreement includes payment for one week of compensation per each year of the employee’s service, as well as an additional $4,500 to offset employee expenses.  The total cost of the layoffs is anticipated to be approximately $30,000, which will be absorbed by the FWCJUA’s 2009 budget.

The Board authorized the FWCJUA Executive Director to offer the separation agreement to all FWCJUA employees who would be impacted the organization’s 2009 workforce reductions. 

 

Producer Committee Report

The Board authorized revisions to the FWCJUA Agency Producer Agreement (“Agreement”) and corresponding changes to the Operations Manual.  The changes will include an automatic renewal provision to make the Agreement perpetual, address the process for future Agreement amendments and permit the FWCJUA Executive Director to suspend an agency or its designated producers in lieu of Agreement termination in cases where eligibility requirement compliance issues may be rectified.

 

Market Assistance Plan Committee Report

The Board authorized revisions to the FWCJUA Market Assistance Plan (“MAP”) that will implement the on-line application submission process, as well as clarify and update current FWCJUA procedures.  The revisions include:

• Key Application Data – Requirements will include “members of a limited liability company” in the total annual estimated payroll used to generate MAP account profiles;
• Day References – Clarification that “day” refers to a business/working day.
• Market Assistance Programs – The notification procedure has been updated for employers or their agencies/designated producers who have submitted a coverage application and subsequently secured voluntary market coverage.
• Voluntary Market Coverage Offers – The process for reporting voluntary market coverage offers to the MAP Manager has been clarified.

 

Rates and Forms Committee Report

The Board approved revisions to the FWCJUA Operations Manual and related forms that will implement the FWCJUA’s on-line application submission process, as well as clarify and update current FWCJUA procedures and adopt changes to the Agency Producer Agreement.  Approved changes to specific sections of the Operations Manual are listed below:

• Key Terms and Definitions
  • Revisions were made to the FWCJUA Application for Coverage, because three of the currently-required forms have been incorporated into Form ACORD 133 FL.
• Service Providers
  • Clarification that “day” refers to a business/working day.
  • Clarification that the service provider is required to review an insured’s operations at least once per annual quarter.
  • Audit classification codes have been updated to recognize discontinued National Council on Compensation Insurance codes and their replacements.
• Agency and Designated Producers
  • The name of the agency licensing/registration regulatory body has been amended to the Florida Department of Financial Services, Division of Agent and Agency Services
  • Coverage application forms, how coverage can be secured through the FWCJUA, effective coverage dates, how to complete the ACORD 130 FL form, and coverage binding procedures have been clarified.
• Employer
  • Employer eligibility standards have been expanded.
• Coverage and Rating Rules and Procedures
  • Deposit and advance premium requirements have been clarified.
  • Exemption and coverage election requirements have been clarified.
  • The FWCJUA’s handling of uninsured subcontractors and independent contractors for purposes of determining proper insurance coverage has been described within the Operations Manual.
  • The following programs, which had been detailed in the NCCI Basic Manual, Florida Miscellaneous Values and identified within the Operations Manual as being available to FWCJUA insureds were revised to shorten the program descriptions and refer users to the NCCI Manual:
    • Drug-Free Workplace Premium Credit Program
    • Contracting Classification Premium Adjustment Program
    • Employer Safety Premium Credit Programs
• Forms
  • Form ACORD 133 FL has been modified to incorporate the following forms that are being discontinued:
    • Applicant’s Affidavit
    • Applicant’s Affidavit As To Employee Leasing 
    • Acknowledgment Of FWCJUA Premium Payment Options
  • The deposit and advance premium requirements in Form ACORD 134 FL have been clarified and authorized payroll service partners have been identified within the Operations Manual
  • Three discontinued forms that had been required to be submitted by a labor contractor for each client were deleted from the FWCJUA Supplemental Employee Leasing Application.

 

Investment Committee Report

The Board re-confirmed holding the following bonds as authorized exceptions to the FWCJUA Investment Policy:  Lehman Brothers (two bonds), Anheuser Busch (two bonds), SunTrust, CitiGroup and Vulcan Materials.

The meeting was then adjourned.  The next Board meeting is scheduled to be held on December 8, 2009 in Orlando.

 

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

 

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