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Appeal allows Florida comp rate hike to move forward

Appeal allows Florida comp rate hike to move forward

A controversial 14.5% workers compensation advisory rate increase apparently will go into effect for Florida on Thursday after the Florida Office of Insurance Regulation filed a notice of appeal late Monday.

A Florida Circuit Court judge ruled on Nov. 23 to void the rate increase proposed and approved by the Boca Raton, Florida-based National Council on Compensation Insurance Inc. and the Florida Office of Insurance Regulation. The decision is being appealed to the First District Court of Appeal for the State of Florida in Tallahassee, according to the notice of appeal.

According to David Langham, Florida’s deputy chief judge of compensation claims, the trial court decision has been stayed pending the outcome of that appeal and “therefore, it appears that the 14.5% increase approved by the Office of Insurance Regulation will go into effect on Dec. 1, 2016, as published,” he wrote in an email to Business Insurance on Tuesday.

“This will affect the market,” he wrote. “Prices of coverage increasing will have some effect on other market choices that employers will make regarding their expenditures for non-fixed costs.”

Meanwhile, the attorney who filed the lawsuit against NCCI and state insurance regulators said his goal is not to lower workers comp insurance rates. James F. Fee, Jr., a workers comp claimant attorney and partner with Miami-based law firm Druckman, Fee & Chait P.A., wants NCCI and regulators to follow the state’s open meeting laws.

“What I hope happens is that, through this lawsuit, there will be transparency in the state of Florida in the rate process,” he said. “I am not out to challenge a specific rate. My issue is that these rates arose in violation of the Sunshine Laws.”

The Florida insurance department appealed Leon County, Florida Circuit Court Judge Karen Gievers’ ruling that secret meetings” between the two organizations violated Florida’s Sunshine Act — and thus warranted a nullification of the rate increase.

Judge Gievers found “undisputed evidence established that none of the meetings at NCCI were open to the public, established that no minutes were kept and established that there was no notice to the public in advance of the meetings.”

She also stated in her ruling that as “a statutorily recognized workers’ compensation rating organization, NCCI is required to conduct its rate filing preparation meetings in public, following proper public notice.”

Following the Nov. 23 ruling, NCCI said that it is “very disappointed in the decision” and it will “continue to believe that NCCI and the Florida (insurance department) have fully complied with the law.”

Logan McFaddin, Tallahassee, Florida-based regional manager for state government relations for the Property Casualty Insurers Association of America, said in an emailed statement that “PCI continues to support the Office of Insurance Regulation and NCCI's position that there was no violation of the state Sunshine Laws.”

“Florida carriers will assess the impact that the court ruling may have on their current book of business,” Ms. McFaddin said about last week’s decision.

NCCI's rate filing was based on major Florida Supreme Court rulings this year that are expected to have a significant impact on workers comp costs.

In April, the state Supreme Court ruled in Marvin Castellanos v. Next Door Co. et al. that the state's attorney fee schedule violated due process under state and federal law as it hindered an injured worker's ability to obtain legal representation.

In June, the state high court ruled in Bradley Westphal vs. City of St. Petersburg et al. that Florida's 104-week cap on temporary total disability benefits was unconstitutional.









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