Florida Circuit Court Judge Strikes Down 14.5 Percent Rate Hike in Fee v. NCCI

UPDATE: The Florida Office of Insurance Regulation appealed and the decision invalidating the rate hike has been stayed, as per Florida administrative code. The 14.5 percent increase will thus remain on schedule and go into effect Thursday December 1st, 2016, according to a WorkCompCentral report. Original story below.


A Florida judge recently shot down NCCI and the Florida Office of Insurance Regulation’s (OIR) 14.5 percent rate hike for workers’ comp in that state, saying that NCCI held “secret” meetings without public notice, and because it is statutorily recognized, acted improperly in doing so. The ruling stems from a lawsuit filed by Miami-based attorney James Fee, who sued the organization in August in order to “introduce some required clarity and transparency into the opaque world of workers’ compensation insurance rates in Florida.”

The controversy stems from an initial 19.6 percent rate increase proposed by NCCI for Florida earlier this year. The organization justified the steep rise by citing a series of Florida Supreme Court decisions which eliminated the cap on temporary total disability indemnity benefits, and perhaps more importantly, invalidated the attorney fee schedule for workers’ comp cases, among other issues. Claimant attorneys in the state argued that the huge increase was not appropriate, even if fees were to rise significantly. After a series of meetings, NCCI’s proposal was revised downward to a 14.5 percent increase which went into effect October 1st, 2016. Prior to last week’s 73 page decision (download at the bottom of the page) from Judge Gievers of Leon County Circuit Court, NCCI has maintained that it is not subject to Florida’s public records and open meetings laws (called the Sunshine Law in Florida).

At this point, rate-making at the 14.5 percent level is suspended indefinitely and employers and carriers in the state are in limbo. Louisiana Comp Blog reached out to NCCI and Florida stakeholders to get their take on the issue.

Florida-based actuary Steve Alexander – who testified against NCCI’s findings at the Florida OIR’s meeting on the initial rate proposal – said in an emailed statement to Comp Blog that he doesn’t know what to expect next, but indicated that he remains wary.

“NCCI has been very successful in the past at getting the support of elected Florida officials to the detriment of injured workers and Florida employers,” Alexander explained. “I didn’t know how much influence they had in the court system. They were obviously in violation of the law, but that doesn’t necessarily mean anything in this state.”

For his part, Deputy Chief Judge of Compensation Claims for the Florida Office of Judges of Compensation Claims and Division of Administrative Hearings David Langham, was similarly cautious. “The fundamental issue at this point is that the Florida system is in a state of Newtonian economics – it will go on and on until something stops it,” he explained. “The OIR will have to create a new system or NCCI will appeal […] it’s not very clear whether they can do both at the same time , and any appeal will take several months to get through the courts, even if [NCCI] filed it today. My perception is that the claimants’ attorneys had issues with NCCI already and that the circumstances this year allowed that to manifest.”

NCCI has remained fairly quiet since the decision came out on November 23rd, however, they did release a statement through Communications Director Dean Dimke saying that, “NCCI is very disappointed in the decision of the Leon County Circuit Court” and that they plan to appeal. The organization declined to provide detail on the timeline for that appeal.

Regardless of the end result though, Alexander, who consulted with the plaintiff in this case James Fee, feels that something has to give. “NCCI is a cartel with the sole purpose of maintaining rates at a high level and restricting competition,” he said. “[It] is so influential that only three out of 250 insurers operating in the state deviate downward from NCCI filed rates. Because of the excessive control the NCCI has over the whole comp system, including rates, it is only reasonable that [it should comply with the Sunshine law]. I estimate that Florida work comp insurers have earned excess profits of $1.8 billion over the last 10 years.”


FL Fee v NCCI Leon County Circuit Court 11-23

FLOIR Notice of Appeal 11-29


Image Credit: NCCI HQ in Florida, TCA Project Profile


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