California Workers' Comp Plan Shifts to New Carrier

by Jack Shinar

California racing officials are hoping for a breakthrough on their longstanding workers' compensation insurance roadblock.

More than a week after an apparent deal with First American fell apart when the insurance carrier backed out, horsemen representing the tracks, trainers, and owners scheduled a conference call Sept. 4 with an unnamed company.

"We have a promising possibility with a company we have been negotiating with," said Ed Halpern, executive director for the California Thoroughbred Trainers.

Halpern said he could offer no specifics, but "just that (the carrier) is trying to come up with a plan that will work for us, and they know our needs. I'm hopeful we'll have something."

California stables have been working around the workers' compensation problem since March, when the last private carrier quit writing policies. Forced to use the state insurance fund, costs have increased dramatically.

The industry response, a so-called "captive insurance" plan, hinges on a single carrier overseeing essentially a self-regulating program whereby the industry would be responsible for monitoring essential elements such as accurate payroll information, safety standards, and claim amounts.

Halpern said the industry thought it had a deal with First American.

"But when we wanted to start writing policies, they said they couldn't do it," he said. "It reminds me a lot of the process of selling property, where you have a shaky escrow. As it gets closer, it's a very nervous time. They start looking for reasons to pull out."

Legislation that would allow horsemen and tracks to kick in up to $5 million in previously earmarked funds from purse money that would help alleviate insurance cost is awaiting Gov. Gray Davis' approval. The state just ended a two-month budget impasse that has been the focus at the state capitol.

"He has hundreds of bills on his desk that have not been signed," Halpern said of Davis. "Ours is one of them."