02/25/2002 12:00AM

Workmen's comp increase hits California trainers hard


ARCADIA, Calif. - Beginning Friday, California trainers will be required to pay substantially higher rates for workmen's compensation insurance after recent negotiations with one of the two providers, Legion Insurance, collapsed.

Many trainers who had used Legion were notified over the weekend by State Fund, the only remaining provider, of the increased rates, which in many cases have doubled. In addition, trainers have been informed they must pay a significant advance deposit by Thursday before their policies will start on Friday.

California trainers are required to have workmen's compensation on file with the California Horse Racing Board to start horses.

Because of the increase in rates, there is concern among industry officials that some trainers may leave the state, particularly those that race in northern California, which offers a lower purse structure than Southern California. Trainers throughout the state will face similar rates, although discounts have been applied to policyholders with fewer claims.

Over the weekend, the issue led some trainers to urge a boycott of the entries to call attention to the situation. Some trainers said privately that they must defer paying other important bills to make insurance payments.

State Fund is charging as much as $43.40 per $100 of payroll for backstretch workers and as much as $93.96 for each starter to cover the jockey.

One prominent trainer said State Fund issued him a policy requiring a deposit of $13,800 due on Thursday. His previous policy charged $12.25 for $100 of payroll, a figure that is growing to $24.98. For his jockey premium, the rate has grown from $26 per race to $54.25. Other trainers say their advance deposits range from $5,800 to $18,000.

The rates vary depending on a trainer's number of previous claims.

Some trainers are already affiliated with State Fund and will continue to pay at their previous rates. They, too, will face an increase in payments when current coverage ends.

"I know I'll face these new rates come July 1," trainer Bill Anton said.

Although the increases are dramatic, they comply with regulations of the state insurance department. "There is no competition," said Ed Halpern, the executive director of the California Thoroughbred Trainers. "As long as you have one company and the state law requiring you to have it, there's a monopoly."

John Van de Kamp of the Thoroughbred Owners of California told a group of approximately 100 horsemen at Santa Anita Sunday that he was meeting with insurance executives this week in an effort to find another company willing to offer policies. In recent years, trainers have had trouble finding sources for insurance, because several companies left the business or stopped offering policies due to risk.

During Sunday's meeting, Halpern said that possible solutions include finding new companies willing to offer insurance, the development of a self-insurance program created by the racetracks, and legislation that would increase takeout on some exotic bets to offset the higher costs.

"People are talking to other companies to see if someone can be brought on board real quick," Halpern said on Monday. "But there is no guarantee that someone will come in."

In a conference call with northern California trainers Sunday, F. Jack Liebau, who heads Magna's California operations, said the company would try to provide whatever long- or short-term help it could.

Magna management has said it would contact an Indiana-based carrier that had indicated last summer it could provide coverage.

But Richard Lewis, a Magna official based in northern California, said there was probably little short-term help that could be offered.

On a long-term basis, he said, changing the takeout rate on exotic wagers and using the additional money to help pay worker's comp costs could be looked at. He also suggested the law that requires trainers to pay for a jockey's worker's comp could be changed. Both would require changes in state laws and regulations.

In northern California, a number of Canadian and Washington-based horsemen have said they will move their horses back to their home bases, and Charlie Dougherty, the northern California director of the California Thoroughbred Trainers, projects that at least 100 horses will be gone by Friday.

"Northern California will be hurt more than Southern California with the number of horses leaving," Dougherty said. "At this stage, there's not a lot to keep people in northern California because of cost-of-living, pressure from state agencies, and the possibility of unionization [of backstretch personnel]. There are far more negatives than positives."

- additional reporting by Chuck Dybdal