The California Thoroughbred Business League (CTBL), composed of racing associations, horsemen's organizations, fairs, and industry stakeholders, has approved transitioning the statewide Workers' Compensation program administered by California Horsemen's Safety Alliance (CHSA) to Finish Line Self Insurance Group (FSLIG). The decision is effective July 1, 2011, the start of the new program year. CTBL is the organization with oversight of funds generated by mutuel handle, intended to be applied to Workers' Compensation costs to lower the expenses that would otherwise be required of trainers and owners.
FSLIG has been in operation for six years, serving Quarter Horse horsemen as well as a select number of Thoroughbred trainers. The program is now being expanded to provide the opportunity to join it for all California Thoroughbred trainers.
"We expect there will be considerable savings for the vast majority of trainers," said Brad McKinzie of FSLIG. "It is a group program, so everyone will have the same premium based on number of horses, with some slight difference for trainers with five horses or less - in an effort to keep the smaller trainers viable."
In addition to lower rates than could otherwise be achieved, the self insurance program offers additional benefits, including trainers being able to initiate coverage for only a $500 membership fee and a $1,000 refundable deposit, no application of "experience modification rates," no payroll audits, monthly billing based on current counts of stalls in use at tracks, and experienced program and claims management. California trainers may even realize a form of profit sharing in upcoming years.
"The difference between a self insurance group and a standard insurance program is that, with a standard insurance program all the premium goes to the insurance company. If they pay out less in losses than they make in premiums, they make a profit," McKinzie explained. "In our program, the premiums go into a loss pool; and if we pay out less than we have in the loss pool, in two or three years we can apply that money to subsidies. Trainers sort of control their own destiny.
"It's important to remember that this isn't a mandatory program," McKinzie added. "If it works well for a trainer, he is welcome to join. What our program strives to do is create a level playing field among all trainers so that they share the risk. We are not in the insurance business to be an insurance company; we are in the business to stabilize the industry. Insuring California horse trainers is our sole purpose for being in business."
According to Alan Balch, executive director of CTT, "In an industry where workers' comp prices are going up and subsidies are going down (due to handle declines), we have brought about an additional price reduction. It resulted from all parties working together."
Finish Line administrators are now contacting all trainers to assess interest from them in starting the application process and providing details about the program. Anyone having questions concerning the FSLIG Workers’ Compensation program may call (714) 820-2743.