Expanding Our Horizons

April 2009

A Note From the President:

2009 is shaping up to be an interesting year – full of opportunities and challenges as we learn to cope and survive in a troubled economic environment. I have several topics to discuss with you, starting with the recent Florida Supreme Court ruling in an important workers’ compensation case.

Murray vs. Mariners Health

The Florida Supreme Court ruled against Mariners Health in a case disputing the provision of the 2003 Statute that established guidelines for attorney fees based on a percentage of the benefi ts obtained by a claimant and eliminated fee awards based on an hourly rate.

This ruling will significantly change the landscape of workers’ compensation insurance by opening up the Statute to allow attorneys to once again advocate on behalf of injured workers with few restrictions on fee awards. We anticipate this willlead to increases in claims costs for all workers’ compensation companies in Florida.

NCCI Rate Increase

Workers’ compensation rates are going up. NCCI’s 8.9% rate increase request to be effective March 1st was ultimately approved as a 6.4% increase. It will take effect for all new and renewal policies starting April 1, 2009.

Expanding Our Horizons . . . Again!

As part of the continuing effort to diversify our policyholder base, I am pleased to announce FHM has received approval to write business in North and South Carolina. We are now ready to write South Carolina business and anticipate being ready to write business in North Carolina by mid-year 2009.

If you have operations in North or South Carolina, Georgia or Alabama as well as Florida, we would like to have an opportunity to help you consolidate your coverage. Also, if you have a relationship with an agency or agent in these states who you believe would be a good match for FHM, we would appreciate a recommendation from you that they consider offering FHM’s products.

Streamlined Payroll Audit Process

Some of you have offered suggestions and others have expressed concerns about our Payroll Audit Process. We listened to you and have worked hard to streamline the process. Our new quarterly audit package has been redesigned so it can be completed using a new, pre-fi lled, one-page form.

State Statutes require workers’ compensation insurance carriers to audit each insured’s payroll to ensure the proper premium is collected; however, they do not specify how the audit is to be done. Unlike some carriers who do costly and time consuming on-site audits, FHM has been using the self-audit process since 1990 and has found it to be an effective tool.

Please let us hear from you with suggestions or concerns about the process so we can work together to protect your interests and collect the information needed to ensure your premium is accurate.

FHMconnect At Your Service

When you go to the FHM web site, you will notice changes that make managing your workers’ compensation program easier and increase the information available to you. The first thing you will notice is the new look. The other big change is FHMconnect, a new web site tool that gives you access to all the information and reports you need to effectively manage your workers’ compensation program.

With FHMconnect, you and your staff will have access to policy information, certificates, First Report of Injury forms,claims information, policy and endorsements, audits, premium billing and reports! If you and your staff are not registered to use FHMconnect, visit our web site at www.FHMIC.com and click on the “register” button under the FHMconnect logo.

Strategies For Surviving In A Tough Economy

In challenging times like these, it is doubly important for all of us to focus on the basics that made us strong and use our financial resources effectively. There are three very important things you can do to effectively manage your workers’ compensation costs: maintain good hiring practices, implement and sustain effective workplace safety programs and be alert for possible workers’ compensation fraud.

Good hiring practices are always important. The bottom line is, know who you are hiring . . . do thorough criminal and background checks, verify the validity of social security numbers and complete a workers’ compensation history investigation. The more thoroughly you investigate prospective employees, the greater chance you have of making good selections of people to serve your customers.

I can’t say enough about the importance of having strong workplace safety programs. Your employees may be distracted by economic concerns and may not be as careful in their work activities. All the more reason to make sure you have a safe workplace and effective safety procedures. Keep the workplace safe so you and your employees can concentrate on the job without workplace injury distractions.

And last, but by no means least, be aware that during times of work force reductions workers’ compensation abuse and fraud increase. Fraudulent claims create a great economic burden for you and can cause workplace disruption. Observant employers and employees are one of our best sources of information in fi ghting fraud.

If you or your employees suspect fraudulent activity, contact us immediately. We will work with you to ensure the claims’ cost you incur are appropriate and protect you and other employers from those who perpetuate workers’ compensation fraud.

FHM Remains Strong

In these tough financial times where every day’s headlines bring unsettling news and troubling stories about how businesses and individuals are looking for new ways to survive, I am pleased to tell you FHM is fi nancially sound. The combination of less severe claims experience in 2008 and the decrease in IBNR (Incurred But Not Reported) reserves allowed FHM to recognize $4,810,364 in Net Income for 2008 which increased our Surplus at year end to $53,045,633.

As always, we are fully prepared to serve your workers’ compensation needs with our firm commitment to A Policy To Do More and to making certain you receive the “lowest ultimate cost” in workers’ compensation.

On behalf of the entire FHM team, thank you for the trust you have placed in FHM by selecting us as your workers’compensation carrier. Please do not hesitate to call on us if we can be of assistance to you in managing any aspect of your workers’ compensation program.

Sincerely,

Bill Bond, Jr.
President

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