Appeals Court Upholds Workers’ Comp Rate Hike

May 10, 2017
Originally published on May 10, 2017 7:55 am

Rejecting arguments that Florida's Sunshine Law was violated, an appeals court Tuesday upheld a 14.5 percent increase in workers' compensation insurance rates that began to hit businesses in December.

A three-judge panel of the 1st District Court of Appeal, in a 19-page decision, overturned a Leon County circuit judge's ruling that would have invalidated the closely watched rate hike.

The case, filed by James F. Fee Jr., a Miami attorney who represents injured workers, has focused heavily on the activities of the National Council on Compensation Insurance, an organization that files rate proposals with the state for insurers.

Leon County Circuit Judge Karen Gievers ruled in November that the organization, commonly known as NCCI, did not comply with the Sunshine Law last year in the lead-up to the state Office of Insurance Regulation approving the 14.5 percent rate hike.

Gievers pointed, in part, to a state law that requires open meetings when rating organizations, such as NCCI, hold committee meetings to discuss workers' compensation rate changes.

But the appeals court Tuesday rejected Gievers' conclusions. The court said, for example, that NCCI did not use a committee in determining proposed rate hikes —  and, as a result, was not subject to the Sunshine Law requirement dealing with committee meetings. The court said an NCCI actuary, Jay Rosen, did rate determinations in Florida.

“This unique extension of the Sunshine Law applies only when the rate-determination committee of a rating organization meets to determine workers' compensation insurance rates,” said the decision, written by appeals-court Judge Lori Rowe and joined by judges Susan Kelsey and Harvey Jay. “NCCI argues, and it is undisputed, that no committee at NCCI has been charged with the responsibility for determining worker's compensation insurance rates in over 25 years.”

The 14.5 percent rate hike, approved by regulators in October, has been part of a high-profile debate during the past year about Florida workers' compensation system. The debate largely stemmed from two Florida Supreme Court rulings last spring that found parts of the workers' compensation system unconstitutional, including a law that strictly limited the fees paid to injured workers' attorneys.

After the rulings, NCCI initially requested a 19.6 percent rate increase for workers' compensation insurers. Regulators later approved the smaller 14.5 percent hike, which began to take effect Dec. 1.

Though Gievers said the rate increase should be invalidated, it was allowed to move forward as NCCI and the Office of Insurance Regulation pursued the appeal.

Meanwhile, business groups lobbied the Legislature to revamp workers' compensation insurance laws to reduce rates. That effort failed last week when the House and Senate could not agree on key issues such as limiting attorney fees.