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.