What determines Tier 1 rates in relation to voluntary market rates within FWCJUA?

Tier 1 rates within the Florida Workers’ Compensation Joint Underwriting Association (FWCJUA) are established based on a system that ensures availability of workers’ compensation insurance for high-risk employers who may struggle to obtain coverage through the voluntary market. In this context, Tier 1 rates are set 25% above the voluntary market rates.

This approach helps to encourage insurers willing to participate in the FWCJUA while also reflecting the higher risk associated with insuring these employers. The 25% markup above the voluntary market rates is designed to facilitate the necessary financial support for covering claims that may arise in this higher risk pool, ensuring that there are sufficient funds to pay for the claims of workers who get injured on the job.

The rationale for setting such rates focuses on balancing the availability of coverage for those who cannot access it elsewhere while also accounting for the increased risks involved.