eLaws of Florida

  SECTION 627.072. Making and use of rates.  


Latest version.
  • 1(1) 2As to workers’ compensation and employer’s liability insurance, the following factors shall be used in the determination and fixing of rates:
    23(a) 24The past loss experience and prospective loss experience within and outside this state;
    37(b) 38The conflagration and catastrophe hazards;
    43(c) 44A reasonable margin for underwriting profit and contingencies;
    52(d) 53Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;
    70(e) 71Investment income on unearned premium reserves and loss reserves;
    80(f) 81Past expenses and prospective expenses, both those countrywide and those specifically applicable to this state; and
    97(g) 98All other relevant factors, including judgment factors, within and outside this state.
    110(2) 111A retrospective rating plan may contain a provision that allows for negotiation of a premium between the employer and the insurer for employers having exposure in more than one state and an estimated annual standard premium in this state of $100,000 or more and an estimated annual countrywide standard premium of $750,000 or more for workers’ compensation. Provisions within a retrospective rating plan authorizing negotiated premiums are exempt from subsection (1). Such plans and associated forms must be filed by a rating organization and approved by the office. However, a premium negotiated between the employer and the insurer pursuant to an approved retrospective rating plan is not subject to this part. Only insurers having at least $500 million in surplus as to policyholders may engage in the negotiation of premiums with eligible employers.
    246(3) 247As to all rates which are subject to this part, the systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance or with respect to any subdivision or combination thereof for which subdivision or combination separate expense provisions are applicable.
    326(4) 327As to all rates which are subject to this part, risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that can be demonstrated to have a probable effect upon losses or expenses. Such classifications and modifications shall apply to all risks under the same or substantially the same circumstances or conditions.
    420(5)(a) 421In the case of workers’ compensation and employer’s liability insurance, the office shall consider utilizing the following methodology in rate determinations: Premiums, expenses, and expected claim costs would be discounted to a common point of time, such as the initial point of a policy year, in the determination of rates; the cash-flow pattern of premiums, expenses, and claim costs would be determined initially by using data from 8 to 10 of the largest insurers writing workers’ compensation insurance in the state; such insurers may be selected for their statistical ability to report the data on an accident-year basis and in accordance with subparagraphs (b)1., 2., and 3., for at least 25321533/5342 535years; such a cash-flow pattern would be modified when necessary in accordance with the data and whenever a radical change in the payout pattern is expected in the policy year under consideration.
    567(b) 568If the methodology set forth in paragraph (a) is utilized, to facilitate the determination of such a cash-flow pattern methodology:
    5881. 589Each insurer shall include in its statistical reporting to the rating bureau and the office the accident year by calendar quarter data for paid-claim costs;
    6142. 615Each insurer shall submit financial reports to the rating bureau and the office which shall include total incurred claim amounts and paid-claim amounts by policy year and by injury types as of December 31 of each calendar year; and
    6543. 655Each insurer shall submit to the rating bureau and the office paid-premium data on an individual risk basis in which risks are to be subdivided by premium size as follows:

    685Number of Risks in

    689Premium Range 691Standard Premium Size

    694(to be filled in by carrier) 700$300-999

    701(to be filled in by carrier) 7071,000-4,999

    710(to be filled in by carrier) 7165,000-49,999

    719(to be filled in by carrier) 72550,000-99,999

    728(to be filled in by carrier) 734100,000 or more

    738Total:

History.-s. 4, ch. 67-9; s. 1, ch. 70-179; s. 3, ch. 76-168; s. 1, ch. 77-457; s. 24, ch. 77-468; s. 94, ch. 79-40; ss. 2, 3, ch. 81-318; ss. 344, 357, 809(2nd), ch. 82-243; ss. 49, 79, ch. 82-386; s. 11, ch. 86-160; s. 114, ch. 92-318; s. 317, ch. 97-102; s. 5, ch. 2000-333; s. 94, ch. 2002-1; s. 1075, ch. 2003-261; s. 2, ch. 2014-131.

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