florida workers compensation assigned risk pool

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Workers Compensation Assigned Risk Plans

Assigned Risk Plans Are the Market of Last Resort

What Is an Assigned Risk Plan?

• Why Workers Comp May Be Hard to Get
• Who Administers the Plan?

How Can You Get Coverage?

Pros and cons of assigned risk plans.

Suppose you try to purchase a workers compensation policy  in the standard market but no insurer will sell you a policy. This will create a dilemma since most states require employers to purchase workers compensation insurance. Fortunately, you'll have an alternative: You can secure coverage from your state's assigned risk plan .

Assigned risk plans are established by the states as a safety net for employers that are unable to obtain workers compensation coverage from "regular" insurers. They are the market of last resort for employers that would otherwise have no source of coverage. All states except monopolistic states have established a plan.   The law in each state determines how the plan is administered and financed. Assigned risk plans are also called the residual market.

The monopolistic states don't need assigned risk plans because all employers in those states are required to secure workers comp insurance from a government-operated fund.

States have created assigned risk plans so that all employers can obtain workers compensation insurance. The ultimate goal is to ensure that employees who are injured on the job will receive the benefits entitled to them by law.

Why Might Workers Comp Coverage be Hard to Obtain?

Here are some reasons why an employer may have difficulty obtaining workers compensation insurance from a standard insurer:

• Poor loss history : If a business has sustained many small losses or a few large ones, underwriters may assume its management doesn't care about safety.
• New business : A new company is difficult for an underwriter to assess because it has no track record.
• Very small business : A very small company may not generate enough premium to compensate for the risk of claims.
• Hazardous occupation : Many insurers are unwilling to provide workers compensation coverage to employers in risky occupations like logging, trucking, and roofing.

Who Administers the Assigned Risk Plan?

All states have designated an administrator that operates the plan and oversees the issuance of policies. In most states, the administrator is one of the following:  

• The National Council on Compensation Insurance (NCCI)
• The state competitive insurance fund
• The state rating organization or another third party

The NCCI administers plans on behalf of 22 jurisdictions.   Each of these states requires all workers compensation insurers that operate within its borders to participate in the assigned risk plan. Insurers may either join a multi-state reinsurance pool or serve as a "direct assignment" carrier. When an insurer participates in a pooling arrangement, it may act as a servicing carrier (issuing policies and paying claims) or provide reinsurance to servicing carriers. If an insurer chooses the direct assignment option, it must agree to accept and retain all risks assigned by the NCCI. The direct assignment insurer pays all losses incurred by the assigned employers and is not reimbursed by reinsurance.

In 14 states, the assigned risk plan is administered by the state competitive fund. Examples are California, New York, and Montana. Most of the remaining states have designated their rating organization or an insurer as their plan administrator.  

If you or your insurance agent is unable to secure workers compensation coverage for your business in the standard market, you or your agent may submit an application to your state's assigned risk plan administrator. The application procedure varies by state. If the plan in your state is administered by the NCCI, you can apply online 24 hours a day or mail your application to the NCCI via the U.S. Postal Service.

If the plan in your state is administered by a state fund or rating organization, check the administrator's website for application instructions.

To obtain coverage in the residual market, you must have applied for coverage and been rejected by one or more insurers. The number of required rejections varies by state. For instance, employers in West Virginia can apply for coverage in the assigned risk plan only if they provide evidence of rejection by two insurers.  

The primary advantage of an assigned risk plan is that it provides coverage to employers that can't obtain insurance in the standard market. One major disadvantage is cost. Employers insured in the residual market generally pay higher rates than those insured in the voluntary market. Those whose experience modifier is greater than 1.0 may also be subject to a surcharge.   In addition, some states have eliminated the premium discount on assigned risk policies. An example is Massachusetts.   A premium discount is a credit applied when the premium exceeds a certain threshold.

Another drawback of assigned risk plans is that employers can't choose their insurer. Their policy is issued and managed by the plan administrator or servicing carrier. A third disadvantage is limited coverage. Policies issued in the residual market may not be as broad as those purchased from standard insurers. For instance, many policies afford no coverage for operations the employer undertakes in states other than the one where the policy was issued.  

Key Takeaways

• Assigned risk plans serve employers that can't find workers comp coverage in the standard market.
• Most plans are administered by the NCCI, a state insurance fund, or a state rating agency.
• Policies purchased from an assigned risk plan are generally more expensive and provide less coverage than policies obtained in the standard market.

IRMI. " Assigned Risk Plans ." Accessed July 30, 2020.

IRMI. " Workers Compensation Residual Market ." Accessed July 29, 2020.

NCCI. " Insuring the Uninsurable. Workers Compensation Residual Market ." Accessed July 29, 2020.

NCCI. " Options for Submitting Assigned Risk Applications Online ." Accessed July 29, 2020.

State of West Virginia, Offices of the Insurance Commissioner. " Workers’ Compensation Assigned Risk Plan ," Page 2. Accessed July 29, 2020.

NCCI. " Assigned Risk Adjustment Program ." Accessed July 30, 2020.

The Workers Compensation Rating and Inspection Bureau of Massachusetts. " Premium Discount ." Accessed July 31, 2020.

NCCI. " Producers' Guide to Understanding NCCI's Residual Market Limited Other States Insurance Endorsement ." Accessed July 30, 2020.

FWCJUA Pricing Tool

This tool was created to assist you in estimating FWCJUA workers compensation insurance premium for Employers.

General Information

Class codes & payroll, officer/sole proprietor/managing member/partner, waivers of subrogation, step 1 - general information  .

  Enter information in the presented fields and click on the "Next" button to move to the "Class Codes & Payroll" entry screen. Any changes after the initial settings on this screen will need to be followed up by clicking on the "Re-Calculate" button to update the Pricing Estimate.   The "Assigned Tier" selected may change based on entered values for the "Experience Mod", "Is New in Business", "Coverage Lapse" and "Lost Time Claims".   Additional information/help on individual entry fields can be found by clicking on the icon to the left of the field.

Step 2 - Class Codes

  Click on the Add Class Code   button to enter a Class Code into the pricing estimate.   To edit a Class Code included in the pricing estimate, click on the icon. To delete an included Class Code, click on the icon.

  Use the filter below to find a class code. Start entering either a class code or class code description to filter the list. When the desired class code is visible, click on it to select it.

Step 3 - Officers/Proprietors/Members/Partners to Include

  Click on the Add Officer/Proprietor/Member/Partner   button to include an individual in the pricing estimate.   To edit an individual included in the pricing estimate, click on the icon. To delete an included individual, click on the icon.

Step 4 - Waivers of Subrogation

  Click on the Add Waiver of Subrogation   button to include a Waiver of Subrogation in the pricing estimate.   To edit a waiver included in the pricing estimate, click on the icon. To delete an included waiver, click on the icon.

Tier Eligibility Criteria

Fwcjua pricing tool help, employer name.

This is the legal name of the Employer. Enter the legal name of the Employer. This entry is optional.

Business Type (Legal Status of Company)

This is the business type/legal status of the employer. Select the appropriate business type/legal status from the drop-down list. A selection is required for estimate generation.

Effective Date

This is the desired effective date of the policy. Enter or select the desired effective date. Date format MM/DD/YYYY. Valid date cannot precede current date or exceed 60 days from the current date. A valid date is required for estimate generation.

Assigned Tier

There are established rating tiers for various classifications of risk which reflect risk of loss, hazard grade, actual losses, size of premium, and compliance with loss control. All Employers shall be assigned to one of three rating tiers. Select appropriate assigned tier for the employer using drop-down selector. Tier explanation can be found on the Tier Eligibility page accessed by clicking on the "Tier Eligibility" link on the page header. Tier selection defaults to Tier 3.

Increased Employer's Liability Limits

Increased Limits will provide additional protection against the common law liability of an Employer for accidents to employees, as distinguished from the liability imposed by a workers’ compensation law. The state’s statutory limits will be automatically included in any workers’ compensation policy. However, coverage limits in excess of the statutory limits will increase your policy premium. The limits are defined as follows: Select the desired limits from the drop-down list. Limits Per Accident for bodily injury by accident. Limits Per Employee for bodily injury by disease. Policy Limits for bodily injury by disease. Limits displayed should be multiplied by 1,000 for the actual value. A selection is required for estimate generation.

Billing Plan

There are three plans offered. Below is a detailed description for each billing plan. Option 1: Payment in Full of TEAP and any Required Deposit Premium - Option 1 is mandatory if the Employer’s Total Estimated Annual Premium (TEAP) is less than or equal to $1,000, unless the Employer qualifies for and selects Option 3. Any Employer may choose to pay their TEAP in full. 100% of the advance premium and deposit premium is due prior to binding coverage. This option must be chosen if the Employer is going to finance their premium with a Premium Finance company. Option 2: Advance Premium Payment Plan plus Payment in Full of any Required Deposit Premium - Option 2 offers a premium installment payment plan if the Employer’s TEAP exceeds $1,000. A 50% advance premium payment of the TEAP and 100% of the required deposit premium is due before binding coverage. In addition, the Employer is required to make payments equal to 50% of the TEAP in 3 equal installments payable 3, 6, & 9 months from policy inception. Option 3: Payroll Service with Premium Withholding Program Payment Plan - No Deposit Premium Required - Option 3 offers a premium installment payment plan with no deposit premium requirement if the Employer is reporting and will maintain employees with payroll on the policy. Certain restrictions apply - see the FWCJUA Operations Manual for details. This plan requires the Employer to execute an application agreement and the required service agreement(s) with an FWCJUA authorized Payroll Service Partner. The advance premium requirement is reduced to 16.7% which is required before binding coverage. A selection is required for estimate generation.

Experience Mod

If the Employer is experience rated, please enter the experience mod factor that will be applicable for this policy. If the Employer is not experience rated or the experience mod is not known, leave blank. Enter the experience mod with format #.## The Experience Mod will be evaluated to verify the Assigned Tier. Experience Mod restrictions on Assigned Tiers can be found on the Tier Eligibility page. This entry is optional.

The Assigned Risk Adjustment Program (ARAP) Surcharge is calculated as a function of the experience rating procedure. If the Employer qualifies, the policy premium will be calculated with an (ARAP) Surcharge. Decimals are allowed. This is not a required field. Enter the ARAP with format #.##. Accepted ARAP range is 1.00 to 1.49, defaults to 1.00. ARAP surcharges only applied to Tier 3 assignments. This entry is optional.

New Business

Select "Yes" if the Employer is a new business. For purposes of Tier 1 and Tier 2 eligibility, means a business enterprise, regardless of business form, which began business operations, such as the sale of goods or the rendition of services, within six months prior to the date the Application for Coverage is received by the FWCJUA. A mere change in the business form of the Employer does not constitute the creation of a new business. For example, a new business is not created when a Sole Proprietor creates a corporation or a limited liability company to transact the same or similar business to that previously transacted by the Sole Proprietor. Furthermore, changes in ownership interest that would result in the continuation of experience if the existing business enterprise were subject to the Experience Rating Plan, shall not result in the creation of a new business. Assignment of Tier 1 is unavailable to new businesses. The Assigned Tier will be re-evaluated for availability on selection. A selection is required for estimate generation.

Coverage Lapse

Select "Yes" if the Applicant has a lapse in Workers Compensation Coverage. For purposes of Tier 1 and Tier 2 eligibility, continuous workers' compensation coverage has been in force, and is still in force, at the time of application to the FWCJUA. Otherwise, there is a lapse in coverage. Assignment of Tier 1 is unavailable to Employers with a lapse in coverage. The Assigned Tier will be re-evaluated for availability on selection. A selection is required for estimate generation.

Lost Time Claims

Select 'Yes' if the Employer has any 'Lost Time' claims within the past 3 years. For purposes of Tier 1 and Tier 2 eligibility, any claims against a workers' compensation policy for a covered employee(s) absent from work for more than eight days because of a work related injury or serious occupational disease constitutes a lost time claim (aka indemnity claim). Enter the experience mod with format #.## Assigned Tier 1 and 2 are unavailable to Employers with "Lost Time" claims. The Assigned Tier will be re-evaluated for availability on selection. A selection is required for estimate generation.

To add a class code to the estimate: Click on the Add Class Code  button. Select and/or fill in the necessary fields. Click on the Save Class Code button to add, or the Cancel button to exit the Class Code entry screen and display included Class Codes. Repeat as desired.

Use the filter box to enter a complete or partial class code or class code description to filter the list below. Click on the desired Class Code / Description to select and populate the Class Code input. A class code followed by the letter "F" will include premium for operations subject to the USL&H Act. Class code "5551 - Roofing - All Kinds & Yard Employees" will trigger a minimum payroll calculation. Class code "7704 - Firefighters & Drivers" will trigger a minimum payroll per volunteer if payroll is less than $1000.

Coverage Type

Select the coverage type for the classification. Use the drop-down selector to add USL&H coverage if necessary. A class code followed by the "F" is pre-loaded to provide USL&H coverage.

Number of Employees

The number of employees assigned to the class code. Only required if class code is rated on a per capita basis.

The total estimated annual of payroll per class code. Enter the total estimated annual payroll for the class code. Entry is required. If no payroll, enter 0.

Officer/Sole Proprietor/Managing Member/Partner Information

To include an Officer/Sole Proprietor/Managing Member/Partner in the estimate: Corporate Officers are considered employees under the law and will be covered under an FWCJUA policy unless the officers file for exemption. Sole Proprietors and Partners in a non-construction industry will not be covered under an FWCJUA policy unless the Sole Proprietor or Partner files for an election of coverage. In the Construction Industry, Officers and Members are automatically covered under an FWCJUA policy unless the Officers or Members elect to be exempt from coverage.

To add an officer/owner/managing member/partner to the estimate: Click on the Add Officer/Proprietor/Member/Partner  button. Select and/or fill in the necessary fields. Click on the Save Individual button to add, or the Cancel button to exit the entry screen and display included Individuals. Repeat as desired.

The name of the individual officer. A name is required to add an officer.

Use the filter box to enter a complete or partial class code or class code description to filter the list below. Click on the Class Code / Description that best describes the activity performed by the individual. A class code followed by the letter "F" will include premium for operations subject to the USL&H Act. Class code "5551 - Roofing - All Kinds & Yard Employees" will trigger a minimum payroll calculation. Class code "7704 - Firefighters & Drivers" will trigger a minimum payroll per volunteer if payroll is less than $1000.

The amount of payroll/remuneration for the individual officer. A value of 0 can be used. A minimum payroll may be calculated Please refer to the Miscellaneous Values Page in the FWCJUA Operations Manual for the minimum and maximum remuneration applicable.

To add a waiver to the estimate: Click on the Add Waiver of Subrogation  button. Select and/or fill in the necessary fields. Click on the Save Waiver button to add, or the Cancel button to exit the entry screen and display included waivers. Repeat as desired.

Use the filter box to enter a complete or partial class code or class code description to filter the list below. Click on the Class Code / Description that best describes the activity performed by the employee(s). Use the drop-down selector to select a classification code. At least on class code must be entered on the "Class Codes" screen to populate the list.

The number of employees to whom the classification/waiver applies.

The amount of payroll generated per the classification code for the waiver.

While this tool cannot develop the definitive premium and is not intended to cover all rules and exceptions, it does calculate a premium based on most class code and payroll situations. The Pricing Tool also allows for the calculation of "what if" scenarios by giving you the ability to adjust payroll information, experience modification, ARAP surcharge and increased limits of Employers Liability Insurance that is available through the FWCJUA. The application will also perform an elementary verification that the entered payrolls are sufficient for Officers and Managing Members or for Sole Proprietors and Partnersthat elect to be covered.

Certain factors that may affect an Employer's premium are not contemplated by the tool. These include Florida Drug Free Workplace Premium Credit, FCCPAP, and the Employer Safety Premium Credit. Please note, that the FWCJUA rates used in the calculation are the current rates for use in the FWCJUA and any revision of those rates will be updated as quickly as possible. This tool does not contemplate any pending rate level changes that may affect future premium calculations.

Contact FWCJUA

Regular Office Hours are Monday - Friday, 8:00 a.m. - 5:00 p.m ET

What Is The Assigned Risk Pool, and Why Are You In It?

Being a commercial lines insurance agent at Viking Insurance Services, I inherently speak with a lot of business owners on a daily basis. As a commercial lines insurance agency specializing in bringing clients out of the workers compensation assigned risk pool, a lot of those business owners are in their state workers compensation risk pool. Roughly half of the clients I speak with don’t know that they are in the assigned risk pool, and/or have no idea what it is. Even fewer know the actual reason they are in the pool to begin with.

So, What is the assigned risk pool?

The IRMI (International Risk Management Institute) defines the assigned risk pool as “a method of providing insurance required by state insurance codes for those risks that are unacceptable in the normal insurance market.” In plain English that just means that it is meant to be a market of last resort for high risk policies, where the insured has not received voluntary offers directly from insurance carriers.

Depending on a number of factors, your business may not be an acceptable risk to standard carriers. Your agent may be submitting dozens of applications, and receiving declination after declination. In that event, you are fortunate to have access to workers compensation coverage through the state risk pool. Without it, you simply would not have access to coverage for work related injuries your employees may sustain.

The being said, more often than not, the clients I speak with have no business being in the assigned risk pool.

Different states, different rules

Each state has its own workers compensation risk pool. While many states use an organization called NCCI to administer their workers compensation program, there are some who administer their own program, as well as North Dakota, Ohio, Washington, Wyoming, Puerto Rico, and the U.S. Virgin Islands which are monopolistic funds.

The rules and requirements vary from state to state, especially when comparing NCCI administered states to independent and/or monopolistic states. It is always a good idea to speak with your agent if you have questions, or check with your local governing body. We have listed links at the very bottom of this page to many of the state insurance commission websites.

Why are the rates so high in the assigned risk pool?

This is a question I get asked all the time. The answer is really pretty straight forward: The assigned risk pool is meant to be a market of last resort for high risk companies, therefore the businesses who are in the assigned risk pool /SHOULD/ all be high risk operations. That being the case, the rates are meant to be commensurate with the risk the insurance companies are taking in insuring this group of high risk policies.

Rates vary from state to state, but in general it is safe to assume that the rates in the pool are the highest available for most workers compensation class codes. In fact, many standard voluntary market carriers use the assigned risk pool rates as a basis to discount their rates against.

Should you really be in the assigned risk pool?

The answer to the above question is often no. There are dozens of workers compensation insurance carriers in the United States, and all of their underwriting appetites are different. What would be a decline for many, may be what another specializes in.

For example, General Contractors are a very difficult class of business to write workers compensation for. There are very few carriers who are willing to write policies when more than 25% of the labor is subcontracted, let alone 75-85% of their labor being subcontracted as is standard with GC’s. That is not to say that you should be in the assigned risk pool though, because there are carriers who specifically write coverage for these types of operations.

Here are a few other common misconceptions on why an account is in the pool:

• Less than three years prior coverage
• High risk occupations such as roofing contractors and arborists
• History of previous claims or losses
• High employee turnover rate

The above reasons are mostly untrue. We write new businesses, with zero prior coverage, in standard voluntary markets every day. Just because you have had some claims doesn’t knock you out either. There are many carriers who will consider offering coverage for accounts with prior losses, and there are even carriers who prefer to write these harder to place risks. We also have carriers who like to write roofers, tree crews, and even cell phone tower installers. With regards to employee turnover, I am asked that question a handful of times out of hundreds of applications.

In reality, the most common reason I come across in dealing with companies who are in the assigned risk pool is that they are dealing with a captive agent. That is probably a term you have never heard before, but what is means is that they are only allowed to write business with one carrier. Examples of captive agents would be Nationwide, Allstate, State Farm, Farmers, etc. So, if you call your local captive agent and ask them to quote your business insurance, the only company they are able to offer quotes with is the one company they work for. What if that company doesn’t write workers compensation in your state, or they don’t write your class of business? You end up in the assigned risk pool.

Alternatively, independent insurance agencies are able to be contracted with various insurance companies. This gives independent agencies the ability to hunt for the best coverage, at the best price, with many different carriers. For more information on why an independent agent is the right choice for you business, check out this article.

Here are some valid reasons to be in the assigned risk pool:

• Experience modifier above a 1.3 to 1.5
• Major claim within the past two years, often in excess of $100k
• Paying employees 1099 when they should really be W2
• Low payroll or no payroll, generally below about $20K annual payroll is tough to place

Save money on your workers compensation by getting out of the pool

As I mentioned above we specialize in bringing clients out of the assigned risk pool. On average we are able to reduce the rate you are paying for your workers compensation coverage by 30-50% by obtaining coverage in the voluntary market. Despite the amount of payroll you are running, and the class code your labor falls under, the savings are almost always substantial.

In addition, the way you pay for your policy will likely change dramatically as well. With assigned risk pool policies insureds are generally required to pay either the entire annual premium or at least a 50% down payment. When coverage is secured in the voluntary market, carriers generally only require 10% down with ten equal monthly payments. There are also “pay-as-you-go “ options which require an even smaller down payment, and give the ability to report payroll on a monthly basis, paying only for what is actually used. Another perk of the latter option is that the carrier generally eliminates the annual audit since the payroll has been reporting monthly.

How to know if you are in the assigned risk pool

If you don’t know if your business is in the assigned risk pool, there are a few ways to figure it out.

First and foremost, just ask you agent! This should not be a secret, and if your agent has withheld this information from you…you need a new agent. If you are absolutely married to your agent because you have been with them for years and when you think about making a change you are left thinking “I wish I knew how to quit you,” something amazing will likely happen when you ask your agent if you are in the assigned risk pool. Nine times out of ten they are going to miraculously come back with a substantially better price for your renewal. If you would like to know WHY that is going to happen, read this little article about the _*types of insurance agents*_ out there.

The second option is to simply give us a call. Our agency, Viking Insurance Services, has access to the full list of all businesses currently in the assigned risk pool in the states we operate in. In a matter of about 5 minutes we can determine whether you are in the assigned risk pool, tell you if we think we can get you out, and give you an idea of what the rates will look like if we are successful.

The bottom line

The bottom line is that many of the businesses we speak with do not belong in the assigned risk pool and are paying significantly more than they should be for their workers compensation coverage.

We know your time is valuable, which is why we have streamlined our processes to take up as little of it as humanly possible. That said, I propose the following question: Would saving even 15% on your workers compensation premiums be worth a total of 10-15 minutes of your time?

Then what are you waiting for? Give us a call today to find out what Viking Insurance Services can do for you.

As promised, here are the links to your states insurance commission’s website:

Georgia State Board of Workers’ Compensation

North Carolina NC Industrial Commission Information for Employers

South Carolina SC Workers Compensation Commission

Virginia Employers | Virginia Workers’ Compensation Commission

TN Injuries at Work

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• Florida Workers' Compensation Joint Underwriting Association, Inc. (FWCJUA) is located in Sarasota, Florida.  This website is not intended as a solicitation in any jurisdiction in which the FWCJUA is not authorized to transact business.
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Assigned Risk Workers’ Compensation Pool

Sports make great analogies:.

For a large number of athletes that want to play sports after middle school, high school or college –  intramural leagues offer a great opportunity. Intramural leagues accept all kinds of athletes: new athletes, old athletes, good athletes, bad athletes, etc. Conversely, people who are talented and want to continue to play sports AND are lucky enough to make it pro have a whole different set of options available to continue playing sports.

Intramural leagues accept all participants and normally have a fee to play. The fee pays for field time, referees, equipment, etc. On the other hand, professional sports pay players to compete. Just as there are two levels in sports: intramural and professional, there are two “levels” of workers’ compensation insurance in the market place: 1) the intramural version is the assigned risk pool where all applicants are accepted and applicants pay more money than option 2) the professional sports version. The pro version is where insurance companies are picky with who they offer insurance to. Although the insurance companies won’t pay you to have workers’ compensation coverage, the coverage in the professional version is much less expensive than the intermural sports version.

For the amount of risk insurance companies take on, they are extremely risk-averse.

Workers’ compensation is federally mandated. What does a company do when they can’t purchase workers’ compensation in the preferred or voluntary market? They turn to the assigned risk workers’ compensation market. It is the market for new in-business and high-risk business operations. All applicants are accepted in the pool.

The pool is a collection of insurance companies that each state requires insurance companies to take part in. The insurance companies in the pool don’t want to be in the pool. They get out as soon as they can, only to have another insurance company replace them. Insurance companies take turns providing insurance to the pool.

Reasons to be in the risk workers’ compensation pool:

• New in business. Without a proven track record, how do you prove you are a claims-free safe company?
• Risky business operations i.e. roofers or tree trimmers. There is an exception to this – when a risky operation becomes large enough there are voluntary markets that are willing to write their workers’ compensation. Companies that are large enough, have enough premium to support claims.
• Ghost policies aka “if any” policies aka no payroll or zero payroll policies. This is common for businesses without employees, whose clients require workers’ compensation on a certificate.
• An experience modifier that is out of control – when a company has too many claims.

As mentioned, insurance companies do not want to be in the assigned risk workers’ compensation pool. They do not know what kind of businesses they will have assigned to them to insure. However, the pool plans for this and charges anywhere from 30% to 40% more than preferred or voluntary insurance companies. Likewise, the insurance companies in the pool take their time processing changes. They provide the least amount of personal service possible. They begrudgingly operate in the pool.

It’s important to work with your advisor to understand why you are in the pool and what you can do to improve your situation. sometimes the pool is your best option. other times, it is not. check out konen’s interactive graphic to learn more about workers’ compensation coverage:  here, join our newsletter.

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Quotes for Florida Workers Compensation Insurance

Workers Compensation Terms

Here are definitions for some of the terms associated with workers’ compensation insurance:

A.M. Best Co.

Founded in 1899, A.M. Best Co. is a full-service credit rating organization dedicated to serving the insurance industry.

Accident Year

The year in which an injury occurred.

Accident Year Experience

The matching of accident year losses with accident year premium. Accident Year Experience changes as losses develop and premium finalizes.

Accident Year Losses

The losses that occurred during an accident year. Accident year losses for a given year change as claims develop.

Accident Year Premium

The combined premium that is attributed to the accident year. Accident year premium for a given year changes as premium adjusts in subsequent years. Accident year premium includes the pro rata portion of premium activity for the accident year.

A person who compiles and analyzes statistics and uses them to calculate insurance risks and premiums.

An individual who settles a claim filed by an insured. The adjuster evaluates the merits of a claim and determines the proceeds that might be payable for the claim.

The process of settling a claim. The settlement process includes evaluating the cause and amount of a loss, determining coverage and payment of any proceeds required under an insurance policy.

Admitted Assets

The assets that are permitted by a state to be used in determining the solvency, or financial condition of an insurance company.

Adjusting and Other Expenses (A&O)

The loss adjustment expenses that are not related to the defense, litigation, or cost containment of a claim. Includes the cost of adjusters. Also includes the cost of inspectors, appraisers, fraud inspectors, while working in the capacity of an adjuster.

An individual authorized to represent an insurance company to sell insurance. A direct agent sells exclusively for one insurance company. An independent agent represents two or more insurance companies.

Aggregate Limit

The maximum amount an insurer will pay for all claims covered by a policy during a policy period.

Allocated Loss Adjustment Expenses (ALAE)

See Defense and Cost Containment Expenses

American Medical Association (AMA)

A national physician’s group. The AMA publishes a set of guidelines called “Guides to the Evaluation of Permanent Impairment.”

Americans With Disabilities Act (ADA)

A federal law that prohibits discrimination against people with disabilities. 800-669-4000 or 1-800-669-6820 (TTY).

Anniversary Rating Date (ARD)

The date that is used to determining the effective rates on a policy. The date is usually the effective date of the policy, unless the rating board establishes a different date.

Annual Statement

The annual report that an insurance company is required to file with the state insurance department, in each state in which they do business. The report is compiled using statutory accounting principles (SAP) by using forms designed by the NAIC. The report provides information needed to assure that an insurance company has adequate reserves, and that the assets are available to meet all benefit payments for which they are liable.

Arising out of and occurring in the course of employment.

Applicants’ attorney

A lawyer representing an injured worker in a workers’ compensation case.

Apportionment

A way of figuring out how much of a permanent disability is due to a work injury and how much is due to other disabilities.

Assigned Risk Adjustment Program

An additional fee placed on Assigned Risk policies (In NCCI jurisdictions) with experience modification factors higher than 1.00.

Assigned Risk Plan – Assigned Risk Pool – State Fund

A state designated program that ensures all employers can have access to workers’ compensation insurance even if insurance companies are not willing to voluntarily write the insurance. Often the last resort option for companies with poor experience ratings. Assigned risk plans usually have higher rates than the voluntary market.

Association Credit

A premium discount provided to members of a trade association that has selected WCF as its workers’ compensation insurance carrier of choice. Members must meet the program’s requirements to obtain the discount.

The acceptance by a reinsurer (assuming company), of part or all of the written insurance transferred to it by the primary insurer or another reinsurer. Assumed premium is the premium received from risk transfer to a reinsurer. Assumed losses are the corresponding losses related to the Assumed premium.

Assuming Company

The reinsurance company that accepts risk from a primary insurer or another reinsurer.

Audited Premium

The final premium for the term of the policy, calculated by auditing actual payroll values for the type of work being performed.

Average Daily Wage (ADW)

A calculation of an injured worker’s average daily earnings. This term is sometimes used to determine entitlement to wage loss benefits following an injury.

Average Weekly Wage (AWW)

A similar calculation to the ADW in determining the entitlement to wage loss benefits by week for a fixed period of time.

Basic Premium

A percentage of the standard premium used in calculating the premium of a retrospectively rated policy. Basic Premium is the portion of the retrospective premium that is loaded to reflect a policy’s expected overhead cost and profit.

Monetary payments and other services provided by insurers under the terms of an insurance policy.

Bulk Reserves

An additional amount added to reserves to account for claim development that has not been included in the case reserves. Bulk reserves can not be attributed to any individual claims, but are an adjustment related to all outstanding claims.

Calendar Year Experience

The matching of calendar year losses with calendar year premium. Calendar year experience does not change as losses develop and premium finalizes.

Calendar Year Losses

The combined losses that occurred during a calendar year. Calendar year losses do not change as claims develop in subsequent years. Calendar year losses include claim activity for the current year claims and additional claim activity for prior year claims that occurred during a given calendar year.

Calendar Year Premium

The combined premium that transpired during a calendar year. Calendar year premium, for a given year, does not change as premium adjusts in subsequent years. Calendar year premium includes premium activity for the current calendar year only, regardless of the policy period.

Cancellation

The termination of an insurance policy before its expiration date by either the insurance company or the policyholder.

Carrier of Last Resort

The insurance company designated to accept a policyholder after the policyholder has been refused coverage by all other insurance companies. The Carrier of Last Resort is usually a state fund. Not applicable in monopolistic states and in states that have assigned risk pools.

Carve-out programs allow employers and unions to create their own alternatives for workers’ compensation benefit delivery and dispute resolution under a collective bargaining agreement.

Carve-Out (PEO Workers’ Compensation Policy)

A hybrid PEO arrangement where the employers maintains their own workers’ compensation policy and does not obtain coverage through the PEO workers’ compensation master policy.

To pass on to another insurance company (reinsurer) all or part of the insurance written by an insurer (ceding company), to reduce the possible liability of the reinsurer. Ceded premium is the premium paid for the transfer of risk to a reinsurer. Ceded losses is the corresponding losses related to the ceded premium.

Ceding Company

The insurance company that transfers risk to a reinsurer.

Certificate of Insurance

A document issued by an insurance company that provides evidence of the existence and terms of a policyholder’s insurance coverage.

A request to an insurance company for payment of a loss covered by an insurance policy.

An individual who submits a claim to an insurance company for an incurred loss.

Claims Outstanding (or Claims Pending)

The total number of open claims at any given time.

Claims Reserve

The reserves attributed to an individual outstanding claim. Claims reserves contrasts with bulk reserves that cannot be attributed to an individual claim, but are attributed to all outstanding claims. Claims Reserves are equal to total incurred less net payments (gross payments less subrogation).

Claims Severity

The average cost per claim. Severity can be based on accident year or policy year, for an individual policy, a group of policies or all policies.

Class Codes

Also called work comp code or class code. Each type of work has risk of injury. Workers’ compensation codes are established that identify the type of work being performed and provide an associate code. Workers’ compensation premium rates are established by codes and are meant to be commensurate with the risk associated with that workplace exposure. Codes descriptions are maintained by NCCI in the SCOPES manual.

Collected Premium

The amount of premium that has actually been received as payment.

Combined Ratio

The sum of the loss ratio and expense ratio. The combined ratio indicates whether an insurance company is making a profit on the business it is writing, without taking into account the investment returns on the premium received.

Commutation

An order by a workers’ compensation judge for a lump sum payment of part or all of an injured worker’s permanent disability award.

Cumulative Injury

An injury caused by repeated events or repeated exposures at work.

Death Benefits

Benefits paid to surviving dependents when a work injury or illness results in death.

Declarations Page (Dec Sheet)

The portion of a policy describing a risk. It includes the insured’s name and address, policy term, policy premium, and amount of coverage.

The amount of loss that the policyholder pays in a claim. The policyholder is liable to pay the deductible before the insurance company is obligated to pay the claim. The policyholder receives a discount by adding the deductible to the policy. The higher the deductible, the lower the premium.

Defense and Cost Containment Expenses (D&CC)

The loss adjustment expenses that are related to the defense, litigation, or cost containment of a claim. Includes surveillance, appraisers, private investigators, and fraud investigators, if working in defense of a claim. Also includes rehabilitation nurses and the cost of engaging experts. Prior to 1/1/98, Defense and Cost Containment Expenses were referred to as Allocated Loss Adjustment Expenses (ALAE).

Deposit Premium

The premium paid at the beginning of the policy that provides for future premium adjustments based on an estimate of the final premium.

Disability Management

A process to prevent disability from occurring or to intervene early, following the start of a disability, to encourage and support continued employment.

A payment to the policyholder by an insurance company out of its surplus or net worth.

Date of Injury (DOI)

The date of the accident that caused the injury.

Earned Premium

The pro rata portion of written premium applicable to the expired portion of the policy term for which the insurance was in effect.

Effective Date

The date coverage begins on an insurance policy.

Employer’s First Report of Injury

A report that an employer is required to file with its workers’ compensation carrier when one of its employees is injured while working.

Employers Liability

Employers liability insurance applies to bodily injury by accident or bodily injury by disease. Bodily injury includes resulting death. The bodily injury must arise out of and in the course of the injured employee’s employment.

Endorsement

A written amendment attached to a policy modifying the terms of the insurance contract. The modification can only become effective with the agreement of the insured, unless it is clearly made solely for the benefit of the insured.

Estimated Premium

The premium on a term policy calculated using estimated payroll exposure. Estimated premium is the policy premium prior to the final premium calculation.

Expense Constant

A flat charge added to small account premiums to cover the cost of issuing and servicing a policy.

Expense Ratio

The percentage of premium used to pay for the acquisition, writing, and servicing of a policy. The expense ratio is equal to underwriting expenses divided by written premium. The expense ratio shows how much it costs the insurance company to write the premiums.

Experience Modification Factor

A premium modifier that reflects the loss experience of a policyholder compared with payroll exposure during the same time period. The modifier increases or decreases the current premium depending on how the actual exposure and losses, for the past three years, compares with expected losses for the same amount of exposure. Experience mods are calculated by the NCCI.

Experience Period

The window of time for loss and payroll data used to calculate an experience modification factor for an employer. Traditionally a three-year period, starting four years prior to the effective date of the experience modifier. Rating bureaus may not wait until three years before establishing an experience rating for an employer. If an employer reaches a certain, relatively low threshold of workers’ compensation insurance premiums in any one of the three years in the experience period the employer is eligible for experience rating. Each state has different thresholds for premium amounts before a company is eligible for experience rating.

Expiration Date

The date coverage ends on an insurance policy.

Being subject to the possibility of a loss.

Extraterritoriality

A provision in workers’ compensation insurance law that extends protection to an employee that is injured in a state other than his state of hire.

Facultative Reinsurance

The reinsurance of part or all of a single policy. In facultative reinsurance, both the primary insurer and the reinsurer have the faculty or option to accept or reject the policy to be reinsured.

Fair Employment and Housing Act (FEHA)

A state law that prohibits discrimination against people with disabilities.

Family and Medical Leave Act (FMLA)

A federal law that provides certain employees with serious health problems or who need to care for a child or other family member with up to 12 weeks of unpaid, job-protected leave per year. It also requires that group health benefits be maintained during the leave.

Final Order

Any order, decision or award made by a workers’ compensation judge that has not been appealed in a timely way.

Final Premium

The premium on a term policy calculated using actual payroll exposure. Final premium is calculated after the policy has expired.

The number of claims occurring. Frequency can be based on accident year or policy year, for an individual policy, a group of policies, or all policies.

Governing Classification

A policyholder’s workers’ compensation class code that has the most payroll exposure. The governing classification generally describes the main business operation of an employer. The governing classification cannot be a standard exception unless there are no other class codes other than the standard exceptions.

Guaranteed Cost

A workers’ compensation insurance policy that cannot be adjusted due to losses that occur during the policy term. Only payroll values affect the premium charge.

Legal proceedings in which a workers’ compensation judge discusses the issues in a case or receives information in order to make a decision about a dispute or a proposed settlement.

Impairment Rating

A rating established by a claimant’s physician that quantifies a claimant’s physical disability. The Impairment Rating is determined by medical examinations, using American Medical Association (ADA) guidelines. Individual states may have additional guidelines that supercede the ADA guidelines. The impairment rating reflects the percentage of a claimant’s whole body impairment.

Incurred But Not Reported (IBNR)

Covered losses that occurred but have not yet been reported to the primary insurance company. A reserve is set up to account for this unknown liability, to more accurately reflect the expected ultimate losses.

Incurred But Unpaid Benefits (IBUB)

The general liability accounts that reflect the reserves that have been booked to pay any future liabilities on outstanding claims and IBNR claims.

Incurred Losses

Paid losses plus additional loss reserves for anticipated future claims. Many loss sensitive insurance policies adjust premium based on incurred losses rather than solely on paid losses.

When a policy is active and coverage is extended; reflects the exposure for which an insurance company is providing insurance coverage.

Compensation for a loss.

Indemnity Claim

A claim which includes payments and reserves for lost wages and medical expenses. Indemnity claims occur when an injured worker is out of work long enough to receive compensation for lost wages.

Independent Contractor

An individual who does a job for another individual, or company, according to a contract and is not an employee of the individual, or company.

Independent Medical Examination (IME)

An examination of an injured worker by a physician selected by the insurance company. Independent Medical Examinations are usually done to determine the appropriateness of a course of treatment, or to provide an evaluation of permanent impairment.

Installment Premium

A partial payment of premium made by a policyholder for coverage on a term policy. The installment premium is determined by dividing the estimated premium into smaller amounts at set intervals during the policy period.

The transfer of risk from one party (insured) to another party (insurer), in which the insurer promises to pay the insured (or others on behalf of the insured) an amount of money, or service, for losses sustained from an unexpected event, during a period of time for which the insured makes a premium payment to the insurer.

Insurance Commissioner

The official of a state charged with the duty of enforcing its insurance laws. Also called the superintendent of insurance and director of insurance.

The person or party protected by an insurance policy.

The insurance company or other organization providing insurance coverage and services to an insured.

Interstate Rating

An experience modification factor that applies across several states. Interstate ratings are calculated by a rating bureau (like NCCI) for employers operating in more than one stated. Most, but not all states (Michigan, Pennsylvania, and Delaware are exceptions), participate in the interstate rating system. Employers can have one experience modifier applying to their operations in most states but a separate modifier calculated by the stand-alone state rating bureau. The separate state modifier(s) apply only to workers’ compensation insurance premiums for the employer’s operations in that stand-alone state.

Investment Income

Money earned from invested assets. An insurance company’s invested assets usually include reserves and policyholder surplus. Net investment income is investment income less investment expenses. (Does not include realized, or unrealized, gains or losses).

Long-Tail Line

A line of insurance coverage where the occurrence and reporting of a loss and the payout of the claim is often spread out over a long period of time. The uncertainty of the length of the time period makes it difficult to determine the value of the claim when the claim is first reported.

Loss Adjustment Expenses (LAE)

All of the costs associated with the settlement of a claim. (See Defense and Cost Containment Expenses and Adjusting and Other Expenses.)

Loss Conversion Factor (LCF)

A multiplier used in calculating the premium of a retrospectively rated policy to include the cost of settling claims. Incurred losses are multiplied by the loss conversion factor to obtain an amount equal to incurred losses plus loss adjustment expenses.

Loss Cost Multiplier

A factor an insurance company files with the state insurance department that reflects the increase, or decrease, in state rates that the insurance company will charge for workers’ compensation.

The percentage of losses plus loss adjustment expenses to earned premium. The loss ratio shows how much premium was used to cover losses and the cost to settle the losses.

A report that lists the losses and expenses for the claims filed on a policy for a given period of time. A Loss Run also reports the premium earned for the period of time and the calculated loss ratio. A loss run also provides a breakdown of losses by paid, reserves, and subrogation. In addition, losses are broken down further by type of loss (medical and compensation) and type of expense (rehab: vocational rehabilitation and ALAE: defense and cost containment). Only expenses charged to a claim are listed on the loss run.

Losses Incurred

An amount representing the losses paid plus the change (positive or negative) in outstanding loss reserves within a given period of time. On the annual financial statement, Losses Incurred is the loss paid during the year plus the loss reserves at the end of the year less the loss reserves at the beginning of the year.

Lost Time Claim

A claim in which an injured worker is determined by a doctor to be unable to work for a period of time. These claims involve the payment of disability benefits in addition to medical costs and other expenses.

Manual Premium

Premium calculated by multiplying the exposure by the manual rate. Manual premium is the premium before experience modification and premium discounts.

Manual Rate

The rate used to calculate premium on a policy. The manual rate is equal to the state rate multiplied by the appropriate loss cost multiplier (preferred, standard, non-standard) that was filed with the state insurance commissioner.

Maximum Medical Improvement (MMI)

The maximum level of medical improvement of an injured worker’s condition. Once a claimant has obtained MMI, it is expected that significant improvements in the future will be minimal.

Medical Case Management

Professional services for the evaluation, monitoring and coordination of medical treatment of claims with specific diagnosis or requiring high-cost or extensive services.

Medical Only Claim

A claim that includes payments for medical expenses only. A medical only claim occurs when the injured worker was not out of work long enough to receive compensation for lost wages.

Minimum Premium

The smallest premium charged by an insurer to issue coverage for an annual period.

Modified Premium

Premium after the adjustment for experience modification.

Monopolistic State Fund

State operated insurance company that is the sole provider of workers’ compensation insurance in a state. In these states, no other insurance companies are permitted to write workers’ compensation insurance. Currently, there are five monopolistic state funds: North Dakota, Ohio, Washington, West Virginia and Wyoming.

Mutual Insurance Company

A company owned and controlled by its policyholders. A mutual insurance company’s surplus may be distributed to its policyholders in the form of a dividend.

National Association of Insurance Commissioners (NAIC)

An organization of state insurance commissioners that promotes uniformity by drafting regulations and model legislation. The NAIC has achieved considerable multi-state uniformity through the annual statement, which insurance company’s use for financial reporting.

National Council on Compensation Insurance (NCCI)

The organization responsible in many states for determining proper workers’ compensation classifications, experience modification factors, and collecting data used for establishing work com rates. NCCI also writes the manuals used in many states to calculate workers’ compensation premiums, and administers the assigned risk plan in many jurisdictions. NCCI is a private company.

Net Investment Income

Money earned from invested assets less investment expenses. An insurance company’s invested assets usually include reserves and policyholder surplus. (Does not include realized, or unrealized, gains or losses).

Net Investment Income Ratio

The percentage of net investment income to net earned premiums.

Non-Admitted Assets

The assets that are not permitted by a state to be used in determining the solvency, or financial condition of an insurance company.

Not Otherwise Classified (NOC)

A class code term denoting that the policyholder’s operations cannot be classified more specifically.

A repeated exposure or event that unexpectedly causes loss or damage.

Operating Ratio

The combined ratio less the net investment income ratio.

Owner Controlled Insurance Program (OCIP)

An insurance program written to cover large construction projects, usually exceeding $100 million in construction value. Under this program, all labor performed under the contract is covered. The program usually includes insurance policies covering workers’ compensation and general liability. Also called “wrap-up” policies.

Paid Losses

The actual amount of total losses paid by an insurance company.

Payment Plans

The payment of premium in periodic installments. The payment periods are usually monthly.

Payroll Exposure

A measurement of the amount of loss possibility to which an employer’s workers are subject. Payroll Exposure is used to calculate the amount of premium that is due on a workers’ compensation insurance policy.

Permanent Partial Disability (PPD)

An injured worker that has a permanent impairment rating of less than 100 percent after maximum medical improvement has been reached. Benefits for PPD are paid over a specified period of time, spending on the severity of the permanent impairment.

Permanent Total Disability (PTD)

An injured worker whose injuries have rendered him permanently unable to perform the kind of work for which he is qualified, and who cannot perform other work that is reasonably available. In most cases, benefits for PTD are paid for the remainder of the injured worker’s life.

Physician’s First Report of Work Injury

A report that a physician files with a workers’ compensation carrier after an injured work is examined by the physician, for the first time, after the accident.

Policies In Force

The total number of policies that are active at a given point in time. Policies-in-force is used to calculate claims frequency.

Policy Period

The time period during which a policy is effective or in force.

Policy Year

The year of the inception date of a policy.

Policyholder Acquisition Costs

The expenses incurred by an insurance company that are directly related to writing a policy.

Policyholder Surplus

The excess of an insurance company’s assets above its legal obligations to pay benefits to its policyholders and claimants. The policyholder surplus is net worth as stated on the statutory annual blank.

Preferred Provider Organization (PPO)

A formally organized entity consisting of hospitals, physicians, and other healthcare providers. A PPO allows insurance companies to negotiate directly for healthcare services at lower price than would normally be charged. Insurance companies recommend the PPOs they have negotiated with to the insureds.

The price paid by a policyholder to an insurance company in return for insurance coverage.

Premium Audit

An examination of a policyholder’s operations, books and records by a premium specialist to determine the actual insurance exposure for the coverages provided.

Premium Discount

A premium discount, based on size of the premium paid. A premium discount is usually at the discretion of the insurance provider.

Premium Refund

The premium returned to the policyholder, which is the amount of premium that has been collected over and above the final earned premium.

Premium Reserves

1. Premium Earned But Not Received (EBNR) – Premium due but not received by the end of the accounting period. 2. Unearned Premium Reserve (UEPR) – Premium paid for coverage beyond the end of the accounting period.

Premium Specialist (also known as Premium Auditor)

An individual who does premium audits for an insurance company.

Premium Tax

Payment made to a state or municipally by an insurance company based on written premium.

Benefits payable under an insurance policy.

Professional Employer Organization (PEO)

A company that provides outsourced insurance benefits and human resource consulting to other companies. The insurance benefits are provided as part of a group policy. Also known as employee leasing.

Prospective Rating

The determining of premium rates based on loss experience over a specified past period of time. The state rates for workers’ compensation are prospectively rated based on prior loss experience for the state.

Amounts received as reimbursement from paid losses. Recoveries include amounts from overpayments, subrogation and second injury fund.

Reinsurance

An agreement whereby the reinsurer, for consideration, agrees to compensate the ceding company for all or part of the losses that the ceding company may experience under the policy or policies which it has issued.

An insurance company that has placed reinsurance risk with a reinsurer in the business of buying reinsurance. Also known as ceding company.

A company that assumes the liability of another by way of reinsurance.

Insurance company funds set aside to met future obligations.

Residual Market

Workers’ compensation written through an assigned risk plan.

Retrospectively Rated Policy

A policy where the final premium is determined based on a formula using the current policy period’s incurred losses. The formula elements and factors are included on the policy. Initially, premium is estimated using expected losses. After policy expiration, the premium is adjusted using actual losses. A retrospectively rated policy is similar to self insurance due to the risk assumed by the policyholder, but unlike self insurance the assumed risk under a retrospectively rated policy is limited.

Risk Based Capital Requirements (RBC)

The minimum capital standards that an insurance company must meet based on an assessment of the risk associated with the insurance company’s operations.

The intrinsic item insured, e.g. the employee covered by workers’ compensation insurance.

Scopes Manual

Document produced by NCCI that defines workplace exposures and assigns the particular workers’ compensation classification codes.

Second-Injury Fund

An insurance fund set up by most states that encourage companies to hire workers that have been handicapped by a prior workplace injury. When a worker has a second injury, after being hired by another company, the current company’s insurance company is responsible for only the costs of the second injury. The second-injury fund will pay the difference between the total costs and the costs of the second injury. Such entities usually are funded by general state revenues or by assessments on workers’ compensation companies.

Self Insurance

Protecting against losses by setting aside a company’s own money rather than purchasing an insurance policy. By being self insured, a company saves expenses that an insurance company charges for acquisition, premium tax, and general overhead.

Sliding Scale Dividend

A premium adjustment (rebated) after policy expiration, based on the actual loss experience of the insured business. The size of the dividend varies depends on the actual loss ratio of the insured.

The minimum standard of financial health for an insurance company, where assets exceed liabilities. State laws require insurance regulators to step in when the solvency of an insurance company is threatened and proceed with rehabilitation or liquidation.

Social Security disability benefits

Long-term financial assistance for totally disabled persons. These benefits come from the U.S. Social Security Administration. They are reduced by workers’ compensation payments received.

Standard Exception

Certain employee groups rated separately instead of being included under the main class code. The standard exception for workers’ compensation are 8810 Clerical Office, 8742 Outside Sales, and 7380 Drivers, unless the main class code description states that one of these employee group are included under the main class code.

Standard Premium

Premium after adjustment for experience modification, safety credits/debits, schedule credits/debits, and association credits, but prior to adjustment for size discount and expense constant. Standard Premium is used in retrospective rating to calculate the basic premium, maximum, and minimum.

Statewide Average Weekly Wage (SAWW)

A computation of average wages paid to employees in a jurisdiction for a set period of time. It is typically used to calculate the minimum and maximum amounts of workers compensation benefits that an injured employee will be entitled to receive.

Statutory Accounting Principles (SAP)

The rules of accounting and reporting required by state law that must be followed by insurance companies in submitting their financial statements to state insurance departments.

Statutory Employee Exclusion Policy

A waiver of insurance coverage, available in some states, that an independent contractor can purchase as proof to other companies that the contractor has elected to not be covered by workers’ compensation insurance. The waiver also excludes the contractor from being covered by another company’s policy.

Stop Loss Provision

A policy provision on a retrospectively rated policy that limits the loss amount for any individual claim that is included in calculating the retrospective premium. A stop loss provision is an additional election, made by the policyholder, for which they are given a higher basic premium factor.

Subrogation

An insurance company’s right to take legal action against a third party responsible for a loss to an insured for which a claim has been paid.

Temporary Partial Disability (TPD)

An injured worker’s status prior to reaching maximum medical improvement has been reached, during which he can perform some work, usually in a modified duty capacity or at fewer than normal hours per day. Benefits for TPD are paid until the worker is released to full duty work, or has reached maximum medical improvement.

Temporary Total Disability (TTD)

An injured worker’s status prior to reaching maximum medical improvement has been reached, during which he is unable to perform any work, as determined by a physician. Benefits for TTD are paid until the worker is released to return to work, or has reached maximum medical improvement.

Term Policy

An insurance policy that is written with an established expiration date. Coverage only continues if the policy is renewed. The policy is written with estimated premium based on estimated payroll exposures. After expiration, a premium audit will gather actual payroll exposures, from which the final premium can be determined. The difference between the estimated premium and the final premium will be either refunded if estimated is greater than final, or billed if final premium is greater than estimated, assuming the estimated premium has been collected.

The provisions of an insurance policy.

Third Party Administrator (TPA)

The performance of the claims functions related to an insurance plan by a company that is not an original party to the insurance plan.

Total Incurred Loss

An amount that represents the current expected payout on a claim over the life of the claim. Incurred loss is equal to net paid losses (paid losses less recoveries) plus reserves.

Total Reserves

All reserves on outstanding claims, whether known or unknown. Includes case reserves, IBNR reserves, and bulk reserves. Also includes reserves for loss adjustment expenses.

Treaty Reinsurance

The reinsurance of part of the policies written by an insurance company. Treaty reinsurance may be by participating type, where the insurance company and reinsurer share the risk based on a pro rata share agreement, or by excess type, where the reinsurer reimburses the insurance company for claims that exceed a predetermined loss amount. Compare with facultative reinsurance.

Ultimate Net Loss

The total payments resulting from a claim over the life of the claim, plus all related expenses, less recoveries and reinsurance. Total payments reflect that the loss has fully developed, and all loss payments are known.

Underwriter

An individual who decides which applicants are accepted or rejected, what coverage is provided, and what price to charge for the coverage.

Underwriting Profit or Loss

An insurance company’s profit or loss strictly from its insurance operations, as opposed to investment operations.

Unearned Premium

The portion of the premium applicable to the unexpired period of the policy.

Utilization Review

The process used by insurance companies to decide whether to authorize and pay for treatment recommended by your treating physician or another doctor.

Voluntary Market

Workers’ compensation insurance written by private insurers outside of the assigned risk plan.

Waiver Policy

See Statutory Employee Exclusion Policy

Workers Compensation Insurance

Insurance coverage for employees required by law in case of injury or death due to an occupational accident, regardless of employer’s negligence.

Workers Compensation Unit Report

A statistical report that provides information about payroll, premium and losses for a specific policy and state. Unit Reports are used to calculate e-mods for a policyholder. Unit reports are submitted to the NCCI or other rating organizations.

Wrap-up Policy

See Owner Controlled Insurance Program

Written Premium

The entire amount or premium written during a certain period regardless of which portions have and have not been earned.

Florida Statute 440

The Workers Comp Law

Work Comp Exemptions

Exclude Owners & Officers

Florida Workers Comp Specific

Find the latest information and rates about the class codes on your workers compensations insurance policy. These are used to categorize your employees by job duty.

2022 Florida Workers Comp Rates

View the New Rates

Workers compensation rates change each year. Find out whether the rates for your class codes are increasing or decreasing from last year.

The manual rates are issued by the Florida Office of Insurance Regulation after being analyzed by the National Council on Compensation Insurance (NCCI).