Gallagher Expresses Support for Workers’ Compensation Rate Cut
Tami Torres or Bob Lotane
Recommended Decrease Will Save Employers $445 Million
TALLAHASSEE – Tom Gallagher, Florida's chief financial officer, today expressed support for Insurance Commissioner Kevin McCarty's rejection of the National Council on Compensation Insurance's (NCCI) rate decrease request of 7.2 percent on workers' compensation rates in favor of a larger decrease. McCarty is recommending a statewide average decrease of 13.5 percent.
"Lowering rates and cutting costs will save Florida's small-businesses an estimated $445 million that can be used to create new jobs and grow our economy," said Gallagher, who oversees the Florida Department of Financial Services.
Last month, Gallagher called for an independent rate review of NCCI's rates. The review confirmed that rates proposed by NCCI did not adequately account for projected losses, earnings and medical costs for workers' compensation insurance companies.
Gallagher also acknowledged McCarty's recognition that this year's decrease is due, in large part, to improved compliance and a reduction in fraud. Gallagher oversees the department's divisions of Insurance Fraud and Workers Compensation.
"We have aggressively fought to combat workers' compensation fraud, and doubled the number of fraud arrests in just one year," Gallagher said. "Our compliance efforts have also added over $52 million in evaded premium to our state's workers compensation system and ensured that nearly 21,000 employees have coverage."
This year's decrease will be the third consecutive drop in rates. Once approved by the Office of Insurance Regulation, the cumulative drop in overall rates since 2003 will total 32.6 percent.
As a statewide elected officer of the Florida Cabinet, Chief Financial Officer Tom Gallagher oversees the Department of Financial Services, a multi-division state agency responsible for management of state funds and unclaimed property, assisting consumers who request information and help related to financial services, and investigating financial fraud. Gallagher also serves as the State Fire Marshal.