Florida Workers’ Compensation Joint Underwriting Association Rates and Forms Committee Meeting Report: February 18

 

The Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Rates and Forms Committee (“Committee”) met on February 18, 2011.   To view the meeting materials, click here.  A brief summary of the meeting follows:

With little discussion, the Committee agreed to recommend that the FWCJUA Board of Governors (“Board”) authorize the booking of Milliman’s best estimates of the reserve for unpaid loss and loss adjustment expenses, both net and gross, for the reinsurance years 1994 through 2010, as well as underwriter loss adjustment expense (“LAE”) as of December 31, 2010.

It was noted that, for most years, there were slight reductions for the Milliman estimates, with one exception for a medical claim relating to a 2005 accident that necessitated a $6.4 million increase. 

Exhibits within the meeting materials include:

• A Comparison of Ultimates: Milliman Best Estimate for December 31, 2010 and FWCJUA Carried
• A draft of Milliman’s Actuarial Analysis of Loss and LAE Unpaid Claim Estimates as of 12/31/2010.

 

FWCJUA Operations Manual Revisions

With no discussion, the Committee approved the following proposed revisions to the FWCJUA Operations Manual (“Manual”) for submission to the Board for its approval:

In relation to Part Four of the Manual relating to Agency and Designated Producers, reference would be eliminated to the discontinued FWCJUA Supplemental Employee Leasing Application form, which specifies whether to complete Side A or Side B.  This would be replaced with reference to the following new forms: 

• The “Employee Leasing Client Supplemental Application” would required to be completed if the Employer is leasing employees from another business, whereas the “Employee Leasing Labor Contractor Supplemental Application” would required to be completed if the Employer is leasing employees to another business.
• Both a “Consent to the Release of Client Initiation or Termination Information” form, along with an “Acknowledgement by Labor Contractor and Client of Terms and Conditions of the Multiple Coordinated Policy” form now would be required regardless of whether the Employer is leasing employees to or from another business at time of application.

If approved, the form-related revisions would then precipitate a reordering of the remainder of the references that pertain to employers that do not have employees at the time of an application.

In relation to Part Six of the Manual relating to Coverage and Rating Rules and Procedures, the proposed revisions would specify that members of a limited liability corporation (“LLC”) in non-construction industries that meet the definition of an employee as defined in section 440.02, F.S. shall automatically be covered under an FWCJUA policy, unless the Employer files the proper exemption of coverage form with the Division of Workers’ Compensation, Bureau of Compliance (reference added to the Division of Workers’ Compensation). 

The revisions establish that the premium to be charged for such members of an LLC would be determined by utilizing either the Premium Determination for Partners and Sole Proprietors or the Maximum Remuneration for Executive Officers as identified in the Miscellaneous Values section of the FWCJUA rate pages.  Members of an LLC would be treated by default as a sole proprietor or partner, unless the LLC provides evidence that it has filed Form 8832 or Form 2553 with the IRS to be taxed as a corporation or as an S-Corporation to be treated as corporate officers for premium determination purposes.

If approved by the Board, these revisions would be subject to approval by the Florida Office of Insurance Regulation.

With no further business before the Committee, the meeting was adjourned. 

The FWCJUA Board will meet on February 22, 2011 to consider the above measures recommended for approval. 

 

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

 

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