Florida Workers’ Compensation Joint Underwriting Association Rates and Forms Committee Recommends 2013 Rate Indication to Board
Aug 31, 2012
The Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) Rates and Forms Committee (“Committee”) met yesterday, August 30, 2012, during which it took several actions.
The meeting began with an overview of the 2013 Rate Indication prepared by Milliman. The indication utilized trends from the National Council on Compensation Insurance January 1, 2013 filing, which are -1 percent for indemnity and 0 percent for medical. These increased from the 2012 filed trends of -3 percent for indemnity and -1 percent for medical. The indication assumes a $30 million written premium projection for 2013 and does not include the statutory possibility of a $750,000 expense offset given the premium projection exceeds the premium threshold.
After hearing the presented information, the Committee unanimously agreed to recommend that the FWCJUA Board of Governors effectuate an overall average premium level change of 6.8 percent effective January 1, 2013 for new and renewal business to be adjusted to reflect any approved voluntary market rate level and class relativity changes that may become effective January 1, 2013.
The Committee next considered the proposed service provider selection process and timeline for securing actuarial services beyond December 31, 2013. Milliman is in the fifth year of the current engagement, which provided for three years and two one-year extension options.
Although the FWCJUA has traditionally contracted with the service provider for a three-year engagement period, the proposal before the Committee at yesterday’s meeting called for a five-year engagement with an option for two one-year extensions. Ultimately, the Committee unanimously agreed to proceed with a three-year initial term, not five.
In addition, the Committee recognized that the FWCJUA no longer maintains a “file ready” loss sensitive rating plan and agreed to hold the development of such a plan in abeyance until such time as the number of accounts with premium of at least $300,000 increases significantly and/or either of the Tier 2 or Tier 3 surcharges fall below 65 percent.
Meeting materials are attached in PDF format.
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