Kentucky Insurance Panel Continues to Work Toward a Final Recommendation

A committee established by Kentucky Gov. Ernie Fletcher to come up with a recommendation on jockey insurance met again Monday and discussed various options but could not come to any definitive agreement on a final proposal.

The 11-member panel that includes representatives from the Kentucky Horse Racing Authority, the state General Assembly, horsemen's organizations, racetracks, and the Jockey's Guild made progress during Monday's nearly 2 1/2-hour meeting, discussing whether the coverage should take the form of accident/disability insurance workers' compensation insurance, whether exercise riders would be included in the insurance coverage, and how to fund the coverage.

By the end of the meeting, a majority of the committee agreed Monday that the best route would be a worker's compensation policy to cover jockeys and a requirement that trainers obtain workers' comp coverage on their own for exercise riders. Under such a two-tier plan, jockeys would no longer be considered independent contractors, but for insurance purposes would be considered employees of the trainers for whom they ride.

There was, however, no agreement on a funding mechanism for the workers' comp insurance policy and the panel agreed to meet again Sept. 1, the deadline set by Fletcher for a recommendation, to finalize its proposal.

Keeneland vice president Harvie Wilkinson, who chaired a subcommittee that reviewed the accident/disability insurance option, said it would likely be less expensive than workers' compensation coverage but would not be as broad. That type of insurance would mirror the $1-million on-track accident insurance policy Kentucky racetracks presently provide for jockeys and exercise riders.

Based on an unofficial survey conducted by members of a subcommittee of the insurance committee, it is estimated that anywhere from one-quarter to one-third of the state's trainers do not provide workers' comp coverage for stable employees, including exercise riders.

While there are no firm numbers on the cost of workers' comp insurance for jockeys, panel chairman Racing Authority member Tom Ludt estimated that the minimum would be about $1.25 million to $1.5 million a year. He said that figure would not be known until bids were solicited from insurers, some time in 2006 at the earliest. He noted that the minimum workers' comp premium cost for any trainer would be $750 annually.

Various funding formulas were bantered about during the meeting, with nearly every constituent involved in the industry -- owners, trainers, jockeys, racetracks, and bettors -- bearing some portion of the burden.

Darrell Haire, a panel member representing the Jockeys' Guild, said he did not believe jockeys should have to pay any of the cost of the insurance policy and suggested that it should come from an increase in the pari-mutuel takeout.

Wilkinson and Churchill Downs president Steve Sexton, who chaired the subcommittee that proposed the workers' comp concept, agreed that it would be counterproductive to increase the takeout rate. A probable downturn in wagering that would result from such a move would result in a lesser amount going to pay for the policy.

Panel member Susan Bunning, president of the Kentucky Horsemen's Benevolent and Protective Association, said owners could bear a disproportionate amount of the funding burden if part of it came from purses and through an assessment on trainers. She noted that most trainers, except for those with smaller operations that would also be impacted, would pass the costs along to their owners.

Sexton and Wilkinson indicated the tracks would be willing to pay up to $300,000 toward funding the policy, if they would no longer have to make any payments to the Jockeys' Guild. Sexton said the $300,000 figure is approximately what the tracks pay the Guild for insurance each year.