Workers' Compensation Institute (WCI360.com) has reported that on August 10,
2016 at 10:44 PM, an attorney filed a lawsuit against the National Council on
Compensation Ins. Inc. ("NCCI"), the Florida Office of Insurance Regulation ("FOIR"), and David
Altmaier as Commissioner of the Office. Represented by Shubin and Bass of
Miami, plaintiff James Fee “seeks to introduce some required clarity and
transparency into the opaque world of Worker’s Compensation insurance rates in
Florida.”
Interestingly the lawsuit was filed in the 11th Judicial Circuit, in
Miami-Dade County, Florida. It is common for lawsuits against state government
to be brought in Tallahassee, Leon County Florida. According to the complaint,
one defendant (NCCI) is domiciled in Palm Beach County. Another (FOIR) is headquartered in
Leon County Florida, but “has an office in Miami-Dade County.” There is no
venue allegation in the complaint regarding the Commissioner of Insurance.
The complaint alleges that the Florida’s workers' compensation rate-making process is controlled by ”one private entity, the national Council
on Compensation Insurance Inc.” It further alleges that the process
engaged occurs “with virtually no public scrutiny.” Relying on the public
records act and the Sunshine Law, plaintiff alleges he seeks to ”take this process out of
the proverbial shadows and mandate that NCCI and OIR operate in a manner
that ensures that the rate proposed by NCCI and ultimately approved by the
Commissioner serves the interest of both insurance company and insureds in
Florida.”
The lawsuit
alleges violations of chapter 627, c. 286, and c. 119 of the Florida Statutes,
as well as article I of the Florida Constitution. Based upon these alleged
violations, and upon principles of due process, plaintiff seeks to void
the recent rate increase filing, and ”enjoin an August 16, 2016 hearing set by
the OIR on this proposed rate increase.” The plaintiff alleges he “seeks to vindicate not only its (his?) own interest in ensuring transparency in
government, but the public’s right to the open government requirements that are
bedrock constitutional and statutory requirements in the State of Florida.”
Interestingly,
plaintiff alleges that Miami-Dade is the appropriate venue for this litigation
because that is the location of his business, a law firm which purchases worker’s
compensation insurance. It is this purchase of Worker’s Compensation insurance,
and the effect thereon of any rate increase, the plaintiff alleges has caused
him damage. Additionally, as plaintiff requested documents, from his office in Miami-Dade
County, he alleges that Miami-Dade is the appropriate venue. Similarly, he alleges
that the public was entitled to notice of any meetings held by anyone at NCCI to discuss
this rate filing, and such notices would necessarily have been required to all
businesses, including his, which is in Miami-Dade County. On these ties to Miami-Dade, Plaintiff alleges that is the correct venue for this litigation.
The complaint
provides some interesting overview of the worker’s compensation market in
Florida. It notes that “over 250 insurance companies offer Worker’s
Compensation insurance to Florida employers.”
That is a significant volume of carriers (later, the complaint says it is nearly 260) and. The complaint notes that all
carrier rate setting is subject to Florida statutory requirements. As an
alternative to a carrier filing its own rates and rating plans, those insurers
may “be, a member of, or a subscriber to, a licensed rating organization which
makes such filings and by authorizing the office to accept such filings in its
behalf.” The complaint states that “the overwhelming majority of Worker’s
Compensation insurers select this option, and utilize NCCI to make rate
filings on their behalf.” Plaintiff therefore alleges that thereby “NCCI
effectively sets a single insurance rate for nearly all Worker’s Compensation
insurers in the State of Florida.”
The complaint
describes “a multitude of factors” which are considered in “the determination
and fixing of rates.” Plaintiff alleges that any meetings held by NCCI to
discuss a rate increase, should be conducted in public, upon proper notice (3
weeks); and,you that any such meeting should be “promptly recorded, and such record
shall be open to public inspection.” Mr. Fee alleges that knowing failure to
provide such notice, is “a misdemeanor of the 2nd degree.” Some readers may question
whether the quoted statutory provision's coverage of any “member of a board or commission of any
State agency or authority of any county, municipal corporation, or political
subdivision” applies to NCCI.
Plaintiff
alleges, “upon information and belief,” that at some point “an NCCI
committee or committees met at least once in the State of Florida to discuss
and decide upon the proposed rate increase.” He asserts that the occurrence of
such meetings was without notice. He alleges that the identity of attendees at
such meeting or meetings is unknown. And, that the ”role, if any, that the oh I
are or the commissioner played in this meeting or meetings is also unknown.”
The plaintiff alleges
that NCCI must certainly have a committee. He acknowledges the insurance
Commissioner’s position that the “NCCI committee” process was discontinued in
1991. But, he contends that any gathering of any group is in fact a
“committee” under the plain meaning of that word as defined by Webster’s
dictionary. The assertion seems to be that any group "chosen to do a particular job" is a "committee." So, by this logic anytime two or more people are gathered for a purpose it is a "committee."
There is also an allegation that the role of NCCI represents “an improper
delegation of the rate-making power to NCCI.”
In closing,
plaintiff asks for a speedy hearing with respect to his complaint. It will be interesting to watch whether this Wednesday night complaint is scheduled for a hearing or trial before next Tuesday's FOIR hearing in Tallahassee.
Plaintiff also seeks a
declaration that NCCI violated the Florida statutes by not providing “notice of
or a meaningful opportunity to participate and committee meetings at which rate
filings” were discussed; and a declaration that all future gatherings of any
individuals at NCCI, which might be a "committee" be publicly noticed as committee meetings. There is also a
count alleging violation of the Florida Sunshine Law. Pursuant to the failure
of public notice for any gatherings of individuals at NCCI, plaintiff asks that
the current rate filing be voided. Plaintiff also seeks provision of documents from NCCI,
and a determination that it violated the Public Records Act in not providing multiple documents already requested.
I am not aware of any answer or response from NCCI. However, in the world of litigation time is required to both file and serve a lawsuit (service is a critical point). After service, that is placing the complaint officially in the hands of the defendant(s), there is time allowed for response. When time has allowed all of this to occur, or if the Court in Miami acts, I will update this post to provide some perspective on the answer or response.
