Updated on 09/16/2011 9:18AM

Guarded optimism for new insurance plan

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A proposed workers' compensation plan from American International Group that would provide lower rates for California horsemen was met with cautious optimism by representatives for trainers, owners, and racetracks Monday at Santa Anita.

California's expensive workers' compensation rates - costing as much as $43 for every $100 of payroll - have forced some trainers out of the sport in California, and are causing economic hardship for numerous others. The new plan would lower rates, but would require tracks and owners to contribute to an emergency fund. Also, the insurance company is requesting that a large percentage of trainers whose policies were renewed on July 1, the most recent sign-up date, participate.

"There was talk that they want as much as 95 percent participation, but it's more that AIG wants to see major participation. They don't just want to pick up stragglers," said Jim Ghidella, who represented the Thoroughbred Owners of California at the meeting and is strongly in favor of the proposal.

The proposal would cap claims at $300,000. Amounts beyond $300,000 would be covered under a separate, secondary policy, according to Ghidella. He said the only way tracks and the Thoroughbred Owners of California would be forced to pay would be if "claims exceed projections, and AIG has been very conservative in their projections.

"Claims would have to be double what we've had in our worst year," Ghidella said.

"We'll know within two weeks whether it's going to work," said Ed Halpern, who heads the California Thoroughbred Trainers. "We're not going to have racing in California if we don't solve this problem."

There had been hope that the new coverage would be in place by Oct. 1, but that is now unrealistic. Instead, the new target date is Nov. 1, according to Jack Liebau, the president of Santa Anita.

Liebau said the tracks and owners would "guarantee certain amounts of contingent liability," and that the money, if needed, would come out of the stabling and vanning fund.

All trainers currently have their worker's comp policies with State Fund, at present the only insurance carrier that will write workers' comp insurance for trainers in California.