FWCJUA Rates and Forms Committee Meeting Report: November 24
Nov 25, 2008
On Monday, November 24, 2008, the Florida Workers’ Compensation Joint Underwriting Association (“FWCJUA”) held a Rates and Forms Committee (“Committee”) meeting.
A legislative update was given that focused on the impact of the October 23, 2008 Florida Supreme Court decision on Emma Murray vs. Mariner Health, Inc. and ACE USA (“Emma Murray”). In its ruling, the Court held that reasonable attorneys’ fees may be charged, and should be determined based on factors in Florida Bar rules, such as time spent. The decision eliminated statutory caps on claimant attorney fees previously established by the Florida Legislature and is expected to return Florida to an hourly fee system.
In response to the Supreme Court’s ruling, the National Council on Compensation Insurance (“NCCI”) submitted an amended rate filing to the Florida Office of Insurance Regulation (“OIR”) in which it requested an increase of 18.6 percent.
The amended NCCI filing addresses the expected increase in Florida workers’ compensation system costs for accidents occurring on or after March 1, 2009, however, the Emma Murray decision is expected to impact system costs for accidents occurring prior to that date.
It is anticipated that a significant unfunded liability will be created in the voluntary market due to the impact of Emma Murray. The FWCJUA, however, may fund deficits resulting from unfunded liabilities through assessments. Through July 12, 2012, the OIR may issue deficit assessments against employers insured in the workers’ compensation voluntary market, as well as through FWCJUA policyholder assessments.
The FWCJUA currently is reviewing 126 open claims that may be affected by the Supreme Court’s ruling to estimate the full impact of the Emma Murray decision.
FWCJUA Executive Director Laura Torrence reviewed rate classification codes and recommended to the Committee that special classification code 0916 (Domestic Workers – Inside – Includes Babysitting Service; Home Health Care Service) be discontinued due to changes adopted in the voluntary market addressing a rating disparity. In the voluntary market, home help service employees are now charged a rate per $100 of payroll, rather than the per-capita premium charge set forth by the FWCJUA classification code.
The Committee approved a recommendation to the Board of Governors (“Board”) that the classification be discontinued to ensure that the FWCJUA is not competitive with the voluntary market.
Ms. Torrence reviewed the most recent draft of the FWCJUA Policyholder Dividend Policy. The most recent version incorporates changes made after the last Committee meeting, including clarifications and updates to the methodology analysis and expense calculations.
After discussion, the Committee approved (for recommendation to the Board) the Policyholder Dividend Policy and a policyholder dividend of approximately $858,000 for the 2001 policy year. For the 2001 policy year, 547 policyholders are eligible to receive a dividend.
The meeting was then adjourned.
Should you have any questions or comments, please do not hesitate to contact Colodny Fass.
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