PUR_7776 2223-18 SS OIR.pdf

PUR 7776 (Revised 07/2022) Page 1 of 3

Incorporated by Reference: Rule 60A-1.045, F.A.C.

DESCRIPTION OF INTENDED

SINGLE SOURCE PURCHASE

(PUR 7776)

AGENCY: Office of Insurance Regulation (Office)

TITLE: Workers' Compensation Statistical Agent

Short description of the commodity or service desired: Workers' Compensation Statistical Agent to administer Florida's statistical plan

CONTACT

Name: Stephen Godwin, Contracts Administrator

Address: 200 East Gaines Street, Tallahassee, Fl 32399

Telephone: 850-413-5024

Email: stephen.godwin@floir.com

Internal tracking number, if any: 2223-18 SS OIR

Date posted: 04/27/2023 Last day for receipt of information: 05/18/2023

This description of commodities or contractual services intended for purchase from a single source is posted in accordance with Sections 120.57(3) and 287.057(3), Florida Statutes (F.S.), and will remain posted for a period of at least 15 business days.

Commodity or Contractual Service Required (commodity or United National Standard Products and Services Code (UNSPSC), manufacturer, model, and description, as appropriate):

81112000 Data Services

81112002 Data processing or preparation services

Quantity or Term (as appropriate):

Five (5) years

Requestor (division, bureau, office, individual, as appropriate):

Life and Health Product Review Unit

Performance and/or Design Requirements (e.g. intended use, function or application, compatibility, requirements; reference to policy, rule, statute or other act of the Legislature, etc., as appropriate):

Workers' Compensation Statistical Agent with Florida and national expertise in the use of Florida's statistical plan for the collection of workers' compensation insurer's loss, expense, and claims experience to aid the Office in determining whether the insurer's activities comply with Florida's insurance code.

Intended Single Source:

PUR 7776 (Revised 07/2022) Page 2 of 3

Incorporated by Reference: Rule 60A-1.045, F.A.C.

National Council on Compensation Insurance

Estimated Dollar Amount:

No cost to the State of Florida

Justification for single source acquisition (what is necessary and unique about the product, service or source; steps taken to confirm unavailability of competition, as appropriate):

The workers' compensation system serves as the injured employee's "exclusive remedy" for workplace injuries and is a critical element of the United States economy that protects workers and their families, improves worker safety, and supports economic growth. At the center of the system is the National Council on Compensation Insurance (NCCI) which serves as the nation’s most comprehensive source for workers' compensation data and knowledge that is relied on by the

National Association of Insurance Commissioners (NAIC), state regulators and policymakers to efficiently regulate the workers' compensation industry in their respective states.

In 1923, under the stewardship of the NAIC, state policymakers and insurers created the NCCI.

Its core mission was to foster a healthy workers' compensation system in the United States through the collection of detailed financial and statistical data. With 100 years of experience as a licensed rating, advisory, and statistical organization, the NCCI manages the nation’s largest database of workers' compensation insurance information and uses the data to analyze industry trends, prepare workers' compensation insurance rate recommendations, determine the cost of proposed legislation, and provide a variety of services, tools and leadership to insurance regulators to maintain a healthy workers' compensation system across the United States.

The NCCI has long been recognized as the nationally preeminent repository of information and knowledge regarding all aspects of workers' compensation insurance and performs many important functions for state governments and insurance companies throughout the country. The NCCI primarily acts in three different capacities, as a Rating Organization, Advisory Organization or a

Statistical Agent or some combination of these roles in a majority of states. In the State of Florida, NCCI has been the only licensed Workers' Compensation Rating Organization for almost 78 years.

As Florida’s only licensed rating organization, NCCI collects and consolidates detailed insurance company financial information and data, including income, losses, loss adjustment expenses, claims, policy data, statistical plans and loss costs. With this information, the NCCI develops rates, rating plans or rating systems on behalf of all Florida licensed workers' compensation insurers. This culminates in an annual rate filing with the Office that will set workers' compensation rates for the following year. Rating Organizations must collect enough detailed statistical data to efficiently promulgate rates. The information collected to complete its obligations as a Rating Organization is the same data and information that a Statistical Agent would collect from the industry on behalf of the Office. As such, it is difficult to separate out a

Rating Organization from an organization that just provides statistical services. In addition to being the only licensed Rating Organization, the NCCI is currently designated as Florida’s only

Statistical Agent and has served in that role for 77 years.

NCCI collects workers' compensation statistical data in at least 37 different states and other jurisdictions and uses one statistical plan in the collection of this data among all states and

PUR 7776 (Revised 07/2022) Page 3 of 3

Incorporated by Reference: Rule 60A-1.045, F.A.C.

jurisdictions. The Office has approved NCCI's statistical plan for use in Florida. Section 627.914, Florida Statutes, states that the Financial Services Commission (Commission) shall adopt rules and statistical plans for use by each insurer specific to workers' compensation data. The only statistical plan currently approved for use in Florida, which all insurers must use, is the NCCI statistical plan. Further, Section 627.331, Florida Statutes states that the Commission shall “give due consideration to the rating systems in use in this state and, in order that such rules and plans may be as uniform as is practicable among the several states, to the rules and to the form of the plans used for such rating systems in other states." In addition to the work NCCI does in Florida as a rating organization and statistical agent, the NCCI also works with the Florida Department of

Financial Services, Division of Workers' Compensation (Division) to provide Proof of Coverage data in support of the Division's statutory obligations. Florida law, including Section 627.4138, Florida Statutes, require insurers, in certain circumstances, to file unit statistical reports directly with NCCI as well as to comply with NCCI "aggregate financial calls, detailed claim information calls, unit statitaical reporting and other required calls."

Although 15 states operate an independent bureau or supply workers' compensation insurance through a monopolistic state fund, there are 35 states and the District of Columbia (NCCI States) that rely on data, information and the services provided by NCCI. In these states, NCCI serves a unique role as a national Rating Organization, Advisory Organization, or Statistical Agent, depending on the individual state’s needs. Additionally, in 24 states NCCI operates the workers' compensation insurance pools for hard to place risks and acts as Plan Administrator. Even though the Independent Bureau states are not considered NCCI States, the NCCI works closely with many of the 11 Independent Bureaus under the umbrella of the Workers Compensation Insurance

Organizations and individual contractual arrangements to provide various services such as data collection, actuarial, rate filing support, residual market administration, auditing, underwriting manuals and rules. NCCI also collects data on behalf of the Federal Insurance Office for the independent bureaus, monopolistic state funds and U.S. territories. As a rating organization, NCCI files rates, rating plans or rating systems on behalf of its member insurers in 36 NCCI States.

Additionally, NCCI prepares the rate recommendations on behalf of the Indiana Compensation

Rating Bureau and the North Carolina Rate bureau. In these states, all the workers' compensation insurers are members and rely on the NCCI to file rates on their behalf. As advisory and statistical agent, the NCCI makes available its national database of workers' compensation financial and statistical data to NCCI States to assist in the regulation of the workers' compensation industry.

Approved By (names & titles, as appropriate, e.g., requestor, requestor management, information systems, budget, purchasing):

Alexis Bakofsky, Chief of Staff

Florida Office of Insurance Regulation

Prospective vendors are requested to provide information regarding their ability to supply the commodities or contractual services described. If it is determined in writing by the agency, after reviewing any information received from prospective vendors, that the commodities or contractual services are available only from a single source, the agency shall provide notice of its intended decision to enter a single-source purchase contract in the manner specified in Rule 60A-1.045, Florida Administrative Code, and section 120.57(3), F.S.