California premiums stay down

INGLEWOOD, Calif. - For the second consecutive year, California Thoroughbred trainers will pay lower base rates for workers' compensation insurance with the start of the fiscal year on Friday.

The lower premium costs, however, are unlikely to be passed on to owners in the form of day rates because of increased salaries for stable staff and exercise riders and higher costs for feed, according to Ed Halpern, the executive director of the California Thoroughbred Trainers.

Trainers who have policies with the plan sponsored by the trainers' group and purchased from the AIG insurance company will pay a base rate of $17.59 per $100 of payroll. With discounts for experience, Halpern said, the average rate is $12.72. The base rate per jockey's mount is $43.02, with discounts lowering that to an average of $25.34, Halpern said.

"We've got trainers paying 8 or 9 percent per hundred," Halpern said. "We figure the average trainer will be paying $12."

Last year, trainers paid an average of $17.50 per $100 of payroll, after discounts. Those costs ranged from $28 to $35 in 2003.

The situation grew so grim at the time that trainers threatened to boycott entries. Some reduced the size of their stables in an effort to cut costs. Others went out of business or left California.

As a result, racing turned to the state government for relief.

In the last three years, California governors Gray Davis and Arnold Schwarzenegger have signed legislation that allowed money to be redirected to offset workers' compensation policy costs.

Davis signed a bill in September 2002 allowing money allocated for stabling and vanning and a marketing committee to be used to help offset policy costs. In May 2004, Schwarzenegger signed a bill increasing the takeout on exotic wagers by one-half of 1 percent, with the additional funds going toward policy costs.

Halpern said rates fell in the last 12 months because the CTT-sponsored insurance program has not been hit with big claims.

"As long as we've able to avoid a rash of larger claims or accidents, the rates will stay down," Halpern said. "You're always somewhat at the mercy of the gods."

Still, he said the cost of racing in California remains high.

"Expenses are just skyrocketing," Halpern said. "Feed rates are going up, and exercise riders want more money. If we still had the workers' compensation crisis, we'd really be in trouble."