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Worker's comp rate hike continues amid legal battle

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TALLAHASSEE, Fla. – A state appeals court Monday said an increase in workers' compensation insurance rates will continue amid a legal battle about whether Florida's Sunshine Law was violated during the ratemaking process.

The 1st District Court of Appeal approved a stay of a Nov. 23 ruling in which Leon County Circuit Judge Karen Gievers said the 14.5 percent rate increase should be rejected because of Sunshine Law violations. The stay will remain in place while the appeals court considers appeals of Gievers' Sunshine Law ruling.

With businesses gradually getting hit with the rate hikes starting Dec. 1, the appeals court said it will consider the appeal on an "expedited" basis. But it appears a ruling on the appeal will not come until February at the earliest, as the court set a Feb. 2 deadline for filing final briefs.

The state Office of Insurance Regulation and the National Council on Compensation Insurance, an organization that files rate proposals for workers' compensation insurers, appealed Gievers' ruling. The appeals court approved a temporary stay that allowed the rate hikes to take effect Dec. 1 and then followed up in Monday's order to keep the stay in place.

A three-judge panel, made up of Chief Judge Clay Roberts and judges Brad Thomas and Lori Rowe, did not explain their reasoning for approving the stay.

In the Nov. 23 ruling, Gievers said, in part, that the National Council on Compensation Insurance, commonly known as NCCI, did not comply with legal requirements about holding public meetings during its deliberations on the hike. Also, she wrote that the organization held improper closed-door meetings with staff members of the Florida Office of Insurance Regulation.

James F. Fee Jr., a Miami attorney who represents injured workers, filed the lawsuit Aug. 10, as insurance regulators were considering an NCCI proposal to raise rates by 19.6 percent. The Office of Insurance Regulation later required that the proposal be scaled back, and the 14.5 percent hike was approved in October.

NCCI issued a statement late Monday saying it was pleased with the appeals court's decision to extend the stay while considering the Sunshine Law issues.

"We continue to believe that NCCI, (Insurance Commissioner David) Altmaier, and the Office of Insurance Regulation have fully complied with the law," NCCI said in the statement. "NCCI looks forward to presenting its case to the appellate court."

The rate hike stems largely from two Florida Supreme Court rulings this year that found parts of the workers' compensation system unconstitutional. The most-prominent ruling rejected strict limits on fees that can be paid to attorneys who represent injured workers.

The rulings and the rate hike are expected to lead to workers' compensation insurance being one of the biggest issues of the 2017 legislative session. A key battleground will be attorneys' fees, with business groups arguing that fees drive up insurance costs. Meanwhile, attorneys for injured workers blame the insurance industry for higher rates.

Bill Herrle, executive director of the small-business group NFIB/Florida, said in a text Monday night that the appeals court's decision on the stay clears the way for the broader legislative debate on the workers' compensation system.

"Now we can get on with fixing the workers' compensation crisis, and it looks like the trial lawyers can't keep hidden from legislators the data from OIR and NCCI that shows just how outrageous attorneys' fees are," Herrle said.

But earlier Monday, Senate President Joe Negron, R-Stuart, indicated he wants to take a broad look at the workers' compensation insurance system --- including looking at the fees paid to attorneys who represent insurance companies.

"I don't know that I've ever heard anyone talk about defense fees, and it turns out they are actually significantly more than the claimants' fees in the (workers') comp system," Negron said. "And then I want to have a focus not just on addressing or reacting to the Supreme Court ruling but looking at the entire system because my commitment (is) to business owners, to small business entrepreneurs, to others in the construction industry to make sure that the financial burden on them is at a level as it should be and not based on other outside forces."

Negron also said he wants to look at how the 14.5 percent rate increase was reached and focus on premiums paid by business owners.

"In the Senate, we want to look at the whole system on how rates are determined and make sure that proposed rate increases are in fact justified and are being arrived at in a fair and appropriate manner," Negron said