Effective August 1, 2016
Overview of Castellanos Decision
On April 28, 2016, the Florida Supreme Court issued an opinion in the case of Castellanos vs. Next Door Company, et al., No. SC13-2082 (“Castellanos”) declaring Section 440.34, Florida Statutes, unconstitutional. The anticipated impact of the decision is the elimination of the statutory caps on claimant attorney fees and a return to hourly fees.
NCCI Proposes Rate Increase
NCCI estimates that the first year impact of Castellanos will be an increase in overall Florida workers compensation system costs of 15%. This estimate does not include the following:
On May 27, 2016, NCCI submitted its filing to the Office of Insurance Regulation (OIR). It includes components for two law changes:
The combined impact of the two components is 17.1% or $623M (17.1 x $3.645B). NCCI proposes that the increased rates will apply to new and renewal policies that are effective on or after August 1, 2016. Additionally, NCCI proposes that the increased rates will apply to all policies in effect on August 1, 2016 on a pro-rata basis through the remainder of the term of these policies. Currently, Florida has a voluntary pure loss cost of 0.99 that is comparable to other states in the Southeast ranging from 0.94 to 1.14. If the rate filing is approved as filed increasing rates by 17.1%, Florida at 1.16 would rank as the highest state in the Southeast.
Retroactive Impact of Castellanos Decision is Not Part of Proposed Rate Increase
This Castellanos component of this filing only addresses the expected increase in Florida workers compensation system costs for accidents occurring on or after August 1, 2016. However, the decision in Castellanos is also expected to increase overall system costs in the state for accidents occurring prior to August 1, 2016 that remain open or are re-opened. Because workers compensation ratemaking is prospective only, insurers are not afforded the opportunity to recoup premium to cover such unforeseen increases in system costs. Therefore, it is expected that a significant unfunded liability will be created due to the retroactive impact of this court decision. NCCI is currently in the process of estimating the unfunded liability and will provide further information at a later date.
 Using Florida’s payroll distribution. Southeast includes FL, AL, GA, NC, SC, TN, MS, LA.
Governor Scott made made 8 appointments to the Construction Industry Licensing Board on Wednesday, January 27. This included the re-appointment of FSPA member Roy Lenois of Artesian Pools of East Florida Inc. He has been reappointed for a term beginning January 27, 2016, and ending October 31, 2019, upon confirmation by the Florida Senate. FSPA thanks Mr. Lenois for his service to the construction industry and particularly the swimming pool & spa industry. The Governor’s press release in regards to all 8 appointments to the CILB can be found at: http://www.flgov.com/2016/01/27/governor-rick-scott-appoints-eight-to-construction-industry-licensing-board/
Florida Swimming Pool Association members visit with legislators during their Legislative Day program in Tallahassee.
On January 20-21, the largest group of FSPA members to date converged on the Florida Capitol to represent the swimming pool & spa industry’s interests in front of lawmakers and agency representatives. These 48 FSPA members representing various areas of the State came together to discuss issues of importance to our industry as well as educate lawmakers on the 5.4-billion-dollar economic impact our industry has on this State.
The event began with FSPA members hearing from representatives of the Department of Health (DOH), who spoke on the status of revisions to 64E-9, F.A.C., the public pool rule that has been undergoing revision for several years and will be finalized by the end of February. Along with the new rule, a revised guidance document to county health departments on how to implement the new rule will be provided, as well as revisions to certain forms. The FSPA has been working with the DOH on the revisions to these documents and was able to ask additional questions on how things will work upon the effective date of the revised rule. Discussions also occurred on the legislation addressing portable pools being used for swimming lessons in county schools. FSPA has worked with Miami-Dade on amendment language that would ensure the DOH still had authority over these pools when it comes to water quality, to ensure children are protected from recreational water illnesses.
Following the DOH, representatives from the Department of Business & Professional Regulation (DBPR) spoke to the group. This included Deputy Director of the Division of Professions, Drew Winters; Executive Director of the Florida Building Commission, Jim Richmond; Program Manager of Building Codes & Standards, Mo Madani; Investigation Manager of the Unlicensed Activity Unit, Erin Reisinger; and Regional Program Administrator of the Division of Regulation, Chris Lee. They gave updates on where things stand with the 6th edition of the Florida Building Code and what they have done in terms of swimming pool electrical safety, as well as updates on all the DBPR is doing when it comes to unlicensed activity.
On Thursday FSPA members hit the ground running, walking the halls of the Capitol, breaking up into groups to cover as much ground as possible. Highlights of the day included a meeting with Senate President Gardiner, a meeting with fellow FSPA member and Representative Larry Ahern, and FSPA being recognized on the Senate floor by Senator Sobel. The Senator cited our Association’s swimming pool safety work and assistance with her electrical safety legislation to ensure experts in the swimming pool and electrical field review current electrical requirements for swimming pools. Members also communicated to legislators the importance of getting more people in the construction workforce – promoting an amendment to establish a Construction Industry Workforce Task Force that would look at the existing critical shortage of trained individuals and develop a consensus path for training the next generation of construction workers – this Task Force would include a representative of the FSPA. The efforts by our attendees discussing this important issue last week helped the industry, as the amendment was added to the building code bill yesterday, January 28.
By the end of the day FSPA attendees met with 86 of the 160 legislative offices, but also touched additional offices by simply dropping off our Legislative Priorities talksheet. Taking the time away from their businesses to support the industry in full force is an important aspect of what FSPA leaders do for the entire membership and for the industry as a whole in Florida. I encourage those who attended to speak with others about attending next year, we would like to ensure all 16 chapters have representation in Tallahassee in 2017.
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