Libertate/RiskMD Merge with Ballator Group

ORLANDO, December 18, 2018 / PRNewswire / —

IMMEDIATE RELEASE:  RiskMD and Libertate Insurance merge with Ballator Insurance Group

Ballator Insurance Group (“BIG”) and Libertate Insurance/RiskMD have merged to combine forces in support of insurance placements and data management for Professional Employer Organizations (“PEO’s”).  BIG and its senior management team have created multiple risk-bearing entities with specialization in “governmental entities”, “not for profits” and “automotive dealers”.  Libertate is a general agency focused on the property and casualty insurance needs of the PEO industry and RiskMD manages data based on a recently patented process.

“The combination of these entities is truly accretive” according to the head of Libertate, Paul Hughes.  “I have known the management team of Ballator for many years and we share common values, beliefs and vision.  They are going to be a tremendous influence in the next chapter of supplying best of class capacity, data management and professional consultation to our PEO clientele.  Our combined capabilities allow us to go very deep in what we are able to offer whether as an insurance agent, a due diligence/data consultant or overall trusted advisor.  Our resources are now greater  than ever before.”

According to Ballator CEO Shane Caldwell, “We are very excited about the the addition of Libertate to the Ballator group of companies. Libertate’s specialty focus and RiskMd’s innovative technology will prove to be a great enhancement for our team members and clients.” 

The combination of Libertate’s premiums with that of B.I.G. brings overall property and casualty premiums under management to close to $200m.

Florida comp rate cut 13.8% in commissioner’s final order

It’s official…effective January 1st, workers’ compensation rates in Florida will decrease by -13.8%.  We will share the new rates as soon as we get our hands on them.

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Florida Insurance Commissioner David Altmaier has issued a final order for a 13.8% workers compensation rate decrease for 2019.

This applies to both new and renewing workers comp policies effective in the state as of Jan. 1, according to a statement issued on Friday by the Office of Insurance Regulation.

The final rate reduction is slightly larger than the 13.4% decline submitted by the National Council on Compensation Insurance in August.

Workers compensation rates in the state have been significantly impacted in recent years by two major court decisions: in Marvin Castellanos v. Next Door Co. et al., the Florida Supreme Court ruled 5-2 that Florida’s mandatory attorney fee schedule was unconstitutional while in Bradley Westphal v. City of St. Petersburg, the Florida Supreme Court ruled that the state’s 104-week cap on temporary total disability benefits was unconstitutional.

Tennessee Insurance Commissioner Approve 19% Comp Rate Cut

It’s official…comp rates in Tennessee will be dropping -19% as of 3/1/19.  See more below from Business Insurance News.

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Tennessee Department of Commerce and Insurance Commissioner Julie Mix McPeak has approved a 19% reduction in workers compensation rates in the state.

The 19% reduction was recommended by the National Council on Compensation Insurance in August and the commissioner approved the decrease on Oct. 31, according to a statement issued by the department on Monday. The reduction will become effective on March 1.

Previous reductions of 12.6% and 12.8% were approved for 2018 and 2017, respectively, according to the statement.

Rate reductions have been attributed to reforms of the state’s workers comp system and fewer significant workplace injuries, according to the statement.

NAPEO Presentation: The PEO Industry Footprint in 2018

After many hours and much hard work, the folks at NAPEO, with their research partners at McBassi & Company, have completed a detailed analysis of the PEO industry footprint as of 2018.  Because there is no government entity which tracks data specific to PEO, NAPEO takes it upon itself to gather and maintain this data for the benefit of all every few years.  I recently had the pleasure of attending a webinar during which they reviewed and discussed their findings published in their latest white paper titled An Economic Analysis: The PEO Industry Footprint in 2018.  Much of the results of this research effort are very exciting for the PEO industry and are summarized below.

Key Points:

  • Total PEO WSEs (Work Site Employees) is greater than the collective total employment of many of the largest and most successful companies in the US
    • Despite this impressive statistic, still only 12.1% of all WSEs employed by a small business (firms with 10-99 employees) are currently using a PEO
      • This leaves room for significant continued growth in the PEO sector in the coming months and years

  • Rate of growth of PEO WSEs is significantly higher than growth rate of employment in US economy as a whole

Additional details:

  • It is estimated that there were 907 PEOs operating in the US in at the end of 2017
  • This includes 175,000 PEO clients, and
  • Approximately 3.7 Million WSE (Work Site Employees)
    • This employee count is equal to the combined employee count of some of the largest and most notable companies in America

  • Total estimated payroll paid in 2017 for these employees was approximately $176 Billion
  • Growth rate of the PEO industry was approximately 14 times higher than the growth rate in employment in the US economy overall in 2017

  • That being said, only 12.1% of small businesses in the PEO “Sweet Spot” are current PEO clients
    • PEO “Sweet Spot” is defined as companies with 10-99 employees
  • 2017 PEO industry growth rate correspond to a sustained rate of the industry doubling every 9-10 years

  • Below is a list of PEOs counts by state at the end of 2017

You can review a copy of the complete power point from with webinar as well as a copy of the published white paper by clicking on the following links:

The PEO Industry Footprint in 2018 – Power Point

2018-white-paper-final

To view a recording of the webinar, follow the below instructions:

  1. Follow this link to view the webinar:
    1. https://napeo.webex.com/napeo/onstage/playback.php?RCID=70d70d63e45404ce0bd939b1a1b2b533
  2. Select Playback

Many good questions were asked during the presentation, so the video is well worth the watch (runs about 45 minutes).

We extend a sincere Thank You to NAPEO for all the great work they do to advocate for and substantiate our industry on behalf of all PEOs.

Delaware Workers’ Comp Rates Decline December 1st

Employers in Delaware will experience another decrease in workers compensation rates effective Dec. 1.

Comp rates will decline an average of 7.3% for the residual market and about 10% for the voluntary market, according to a statement by Delaware Insurance Commissioner Trinidad Navarro on Monday.

“I am delighted to approve yet another decrease in workers’ compensation rates in Delaware and even happier to see a double-digit average decrease in the voluntary market,” he said in the statement.

For the second year in a row, all actuaries reviewing the comp rate filing agreed that another rate drop was warranted, he added.

Original Article 

 

Are YOUR Client Companies Profitable?

The business model of many PEO’s includes utilizing the resale of workers’ compensation as a profit margin. For this to be successful, the PEO must understand the liabilities and assets affiliated with each of their workers’ compensation policies and price them appropriately. Both guaranteed cost and loss sensitive platforms have many variables which need to be understood over the course of the policy term to do this successfully. Because of this, understanding profitability at a portfolio or even a policy level can sometimes be a challenge. Understanding the profitability of individual client companies within master policies or with exposures spread over multiple policies adds an additional level of complexity.

At RiskMD we are able to seamlessly solve this problem! By tracking assets (premium) and liabilities (claims) of each client company based on their unique FEIN we are able to understand loss ratios and loss/profit margins on each client company within a given book of business. This holds true regardless of how coverage for the client company is structured, i.e. master policies, MCP’s (multiple coordinated policies), client direct policies or a combination thereof. This also holds true year-over-year regardless of changes in carriers or policy structure for any given client company.

This analysis of each client company can be performed using the carrier’s billed premium or the PEO’s charged premium. This allows us to understand performance of clients and policies as the carrier would view them, giving us greater leverage for negotiating pricing at renewals. Additionally, this allows us to understand client and policy profitability to the PEO itself.

To learn more about RiskMD’s patented process and how to understand YOUR data, contact David Sink at (407)613-5489 or by email: dsink@riskmd.com

19% Workers’ Compensation Rate Decrease Proposed for Tennessee

NCCI is recommending a sizable rate decrease for Tennessee at -19%.  If approved, the decrease will be effective 3/1/19.  See more information below from Insurance Journal.

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The National Council on Compensation Insurance (NCCI) has filed for a 19.1 percent decrease for workers’ compensation voluntary market loss costs in Tennessee – the largest recommended decrease since reforms to the state’s workers’ compensation system were passed in 2013.

The filing, made towards the end of August, is based on premium and loss experience for policy years 2015 and 2016, according to a filing executive summary released by NCCI. If approved the rates would go into effect March 1, 2019.

NCCI said the proposed decrease is attributed in part to a continued decrease in Tennessee’s lost-time claim frequency. NCCI also noted that both indemnity average cost per case and medical average cost per case have remained “relatively stable” in recent years after adjusting to a common wage level.

The proposed changes in voluntary loss cost level by industry group are as follows:

If approved, the rate decrease would be the eighth consecutive reduction in workers’ compensation rates. Last year, NCCI filed for a rate reduction of 12.6 percent and a 12.8 percent reduction was approved in 2016. Insurance carriers combine NCCI’s loss cost filings with company experience and expenses to develop insurance rates. In 2017, the Tennessee Department of Commerce & Insurance noted that since Tennessee introduced significant changes to its workers’ compensation system in 2014, NCCI filings have totaled loss cost reductions of more than 36 percent.

The workers’ compensation reforms that took effect in 2014 included the creation of a new administrative court system to handle workers’ compensation claims – moving the state’s claims process from a tort system to an administrative one. The reforms also established medical treatment guidelines and provided a clearer standard in determining to what degree an injured worker’s medical condition may have contributed to the cause of an on-the-job injury.

In June, a study by the Workers Compensation Research Institute (WCRI) attributed a drop in the average total cost per workers’ compensation claim of 6 percent in 2015 in part to the state’s workers’ comp system reforms.

“Most of the 6 percent decrease in the average total cost per workers’ compensation claim in Tennessee was from a 24 percent decrease in permanent partial disability (PPD) benefits. Total costs per claim incorporate payments for medical treatments, indemnity benefits, and expenses to manage claims,” said Ramona Tanabe, WCRI’s executive vice president and counsel, said in a statement at the time.

The WCRI study, which compared Tennessee workers’ compensation systems in 17 other states, also noted that worker attorney involvement has decreased in recent years and that time to first indemnity payment within 21 days of injury in Tennessee was similar to the other study states during 2016/2017. The study used claims data with injuries dating back to Oct. 1, 2014, and payments made through March 31, 2017.

Insurer trade group the Property Casualty Insurers Association also noted the impact the 2013 reforms have made in the state.

“Tennessee has had excellent financial results in the workers compensation market following the workers compensation reforms of 2013,” said Jeffrey L. Brewer, vice president of PCI Public Affairs. “Claims frequency continues to decline as a result of automation and improved employer safety programs. Loss costs appear to be stable.”

A spokesperson for TDCI said in an e-mail to Insurance Journal that it would be premature for the department to comment on the potential for a rate reduction given that the figures are preliminary and still need to be examined by actuaries. Commissioner Julie Mix McPeak has 90 days from the filing date to make a decision on the filing.

Florida Workers’ Compensation Rates Plummet Again

From our friends at workcompcentral.com…

NCCI Recommends 13.4% Rate Reduction

Two years after insurers and business groups warned of dire consequences from landmark Florida Supreme Court decisions on attorneys’ fees and benefit levels, workers’ compensation rates could soon drop to their lowest level in years.

Bill Herrle

The National Council on Compensation Insurance announced Monday afternoon that it is recommending a 13.4% decrease in rates for Florida, the second straight year that the rating organization has recommended a reduction in the state.

The cut comes two years after a 14.5% rate increase on the heels of Castellanos v. Next Door Co., which struck down statutory limits on attorneys’ fees, and Westphal v. City of St. Petersburg, which held that a 104-week cap on temporary disability benefits was unconstitutional.

If approved by the Florida Office of Insurance Regulation, the latest reduction will mean that workers’ compensation rates for next year will be about 10% lower than they were before the Castellanos and Westphal decisions. That’s roughly what the rates were before the 2003 reform package passed by the Florida Legislature that limited legal fees and benefits duration.

A small-business group predicted that Monday’s filing will spark economic growth.

“The small-business economy in Florida is hot, and it’s going to get a lot hotter as a result of today’s great news from NCCI,” said Bill Herrle, executive director of the National Federation of Independent Business in Florida. “Lower workers’ comp rates equal a direct reduction in small-business owners’ expenses, which means big things for growth.”

A claimants’ attorney said the filing simply puts rates back to their correct level, and that the court rulings have had a much smaller impact that insurers had feared.

“Attorneys’ fees are a product of how well an insurance adjuster handles claims,” said Mark Zientz, a Miami attorney who filed an amicus brief in the Castellanos case. “If they’re handled correctly, there’s no need for high attorney fees.”

The rate reduction shows that insurance carriers since Castellanos have been more careful with claims, which helps them avoid expensive litigation, he said.

The size of the recommended rate reduction was not surprising, Zientz said, because “from 2003 to 2015, rates were inflated for no good reason.”

An explanation of the filing from the NCCI notes that the rate reflects fewer losses by insurers, which is largely the result of a long-term and nationwide decline in the number of claims filed by injured workers.

Some claimants’ attorneys have said the drop in claims reflects a greater emphasis on workplace safety; shows that because of reduced benefit levels in some states, some workers don’t bother with filing claim; and shows that a growing number of U.S. workers are now considered independent contractors, not employees who receive benefits.

The NCCI did not dismiss the court rulings altogether but said that full impact of the two cases will not be known for years to come. So far, though, “the favorable loss experience in policy years 2015 and 2016 has more than offset the combined cost increases that have emerged from those court decisions.”

The NCCI obtained data from the state’s largest workers’ compensation carriers, and the data is consistent with NCCI’s initial assessment of how Castellanos would impact the Florida marketplace, the organization said. Most carriers reported some amount of claim cost increases, but many insurers were not materially affected.

The ratio of claimant attorney fees to benefit settlement amounts has climbed, from 13% in 2014 to 22% through June of this year, the NCCI filing said, quoting data from the Florida Division of Administrative Hearings.

Indeed, last week at the Workers’ Compensation Institute’s annual conference in Orlando, Florida’s Deputy Chief Compensation Judge David Langham presented data that showed the impact of Castellanos may be felt for a number of years.

Although the number of petitions filed in compensation claims has remained relatively flat for the past decade, claimants’ attorneys’ fees climbed 36% in fiscal 2016-2017, the year after the court ruling, Langham said at the conference. In 2017-2018, claimants’ attorneys’ fees increased another 7%.

Despite that, paid loss ratios have dropped significantly since 2010, most sharply since 2015, the NCCI filing data shows.

“The primary driver behind the recommended rate decrease is the long-term decline in claim frequency offsetting increases in claim severity, and cost increases from the Castellanos and Westphal court cases,” the filing’s explanatory memo reads. “Policy year 2017 will be the first full policy year post-Castellanos, but the full effects of that court decision will not materialize for several years to come.”

Also at the WCI conference last week, Florida Insurance Commissioner David Altmaier predicted that the expected NCCI rate recommendation would be the determining factor on whether legislation would be introduced next spring to address attorneys’ fees. On Monday, Altmaier’s office did not comment on the filing before the close of business.

If recent history is a guide, the lower rates may mean that a further attempt to cap attorneys’ fees will be all but forgotten in the 2019 legislative session. A 9.5% rate reduction earlier this year surprised many and took some steam out of employers’ demands for new limits on fees.

Herrle’s statement Monday did not mention the cost of lawyers.

“Small-business owners are reporting record high levels of optimism, according to NFIB’s Small Business Optimism Index, and news like lower workers’ comp rates fuels their confidence,” Herrle said. “Small-business owners are in the driver’s seat, and Florida’s economy can look forward to the results — increased job growth, increased wages, and unprecedented expansion overall for the small-business sector.”