Fla. Stat. 627.072
Making and use of rates
(1)
As to workers’ compensation and employer’s liability insurance, the following factors shall be used in the determination and fixing of rates:The past loss experience and prospective loss experience within and outside this state;The impact resulting from the past loss experience and prospective loss experience for insurers whose data are missing from statewide experience due to insolvency. Prior reported data for such insurers and all other relevant information may be used to assess the impact on rates;The conflagration and catastrophe hazards;A reasonable margin for underwriting profit and contingencies;Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;Investment income on unearned premium reserves and loss reserves;Past expenses and prospective expenses, both those countrywide and those specifically applicable to this state; andAll other relevant factors, including judgment factors, within and outside this state.(a)
The past loss experience and prospective loss experience within and outside this state;(b)
The impact resulting from the past loss experience and prospective loss experience for insurers whose data are missing from statewide experience due to insolvency. Prior reported data for such insurers and all other relevant information may be used to assess the impact on rates;(c)
The conflagration and catastrophe hazards;(d)
A reasonable margin for underwriting profit and contingencies;(e)
Dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;(f)
Investment income on unearned premium reserves and loss reserves;(g)
Past expenses and prospective expenses, both those countrywide and those specifically applicable to this state; and(h)
All other relevant factors, including judgment factors, within and outside this state.(2)
A 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.(3)
As 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.(4)
As 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.(5)(a)
In 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 21/2 years; 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.If the methodology set forth in paragraph (a) is utilized, to facilitate the determination of such a cash-flow pattern methodology:Each 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;
Each 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
Each 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:
Number of Risks in
Premium Range Standard Premium Size
(to be filled in by carrier) $300—999
(to be filled in by carrier) 1,000—4,999
(to be filled in by carrier) 5,000—49,999
(to be filled in by carrier) 50,000—99,999
(to be filled in by carrier) 100,000 or more
Total:
(5)(a)
In 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 21/2 years; 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.(b)
If the methodology set forth in paragraph (a) is utilized, to facilitate the determination of such a cash-flow pattern methodology:Each 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;Each 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; andEach 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:Number of Risks in
Premium Range Standard Premium Size
(to be filled in by carrier) $300—999
(to be filled in by carrier) 1,000—4,999
(to be filled in by carrier) 5,000—49,999
(to be filled in by carrier) 50,000—99,999
(to be filled in by carrier) 100,000 or more
Total:
Source:
Section 627.072 — Making and use of rates, https://www.flsenate.gov/Laws/Statutes/2024/0627.072 (accessed Aug. 7, 2025).