06/29/2004 11:00PM

Calif. insurance rates drop


California trainers began paying dramatically lower premiums for workers' compensation insurance this week as part of legislation approved in May that raised the takeout on exotic wagers placed on California races.

Beginning with the start of the fiscal year on Thursday, a subsidy derived from the raise in takeout is being paid directly into policies held by trainers. The subsidy has cut in half the workers' compensation costs for many trainers, according to Ed Halpern, the executive director of the California Thoroughbred Trainers.

Halpern said that trainers will pay an average of $17.50 per $100 of payroll. In the past year, those costs ranged from $28 to $35, he said.

The reduction came through a subsidy created by the legislation, which increased the takeout by 0.5 percent, from 20.18 to 20.68 percent, on all bets other than win, place, or show. The increase, which took effect in late May, is expected to raise $10 million annually.

According to Halpern, trainers who hold policies with the AIG insurance company will pay a base rate of $30.71 per $100 of payroll. With a subsidy of $8.71 from the legislation, and further discounts available for policies valued at $5,000 or more and for a lack of recent claims, the average rate fell to $17.50. Trainers who have policies with the government-backed State Fund will also receive the subsidy, Halpern said.

"I know one trainer who is paying $12," Halpern said.

The subsidy is the second major element of the legislation, which was signed by Gov. Arnold Schwarzenegger on May 13. In late May, a starter's fee was launched, guaranteeing a $400 payout in Southern California and $300 in northern California to owners whose horses finish fifth or worse in a race. A smaller sum is paid for horses that participate on the northern county fair circuit.