NY clients swerve rate hike

Crisis averted? Brokers catering to one of the oldest markets in sporting think so

Insurance News

By Lyle Adriano

On December 30, the New York Gaming Commission approved a plan to raise the workman’s compensation insurance rates for New York horsemen effective 2016; the raise was less than initially suspected, allaying some worries among horsemen. Furthermore, should additional legislation be approved this year, compensation rates could be further adjusted to match 2015’s rates.

The plan approved last year required owners and trainers to pay a base premium of $2,500, with $1,500 due on Jan. 1 and the remaining $1,000 to be settled on or before June 1. Last year, the base premium was $2,475. Thanks to legislative changes that increased the share of purse money to be funneled into compensation premiums (from 1% to 2%), the base premium was lowered to $1,500.

Moving forward, the plan will keep the scheme of setting aside 2% of the purse money for workman’s comp. To keep the premiums within 2015’s levels, the Jockey Injury Compensation Fund has to come up with other mechanisms to fund the payments.

The overall cost of workman’s comp in 2016 is $1 million more than it was last year, according to JICF owner and member Joe Applebaum.

Horsemen will seek further legislation that would allow them to use a purse cushion coverage (a reserve purse fund held by the NYRA that is above the required amount to be paid out) to cover the costs, added Applebaum. Officially, the New York Racing Associaition cannot maintain a purse account higher than $6 million.

It is hoped that another funding mechanism can be devised following an audit of the New York State Insurance Fund—from which the workman’s comp is purchased.

“We are aggressively auditing our account with the New York State Insurance Fund in pursuit of money that we’re due from previous years,” Applebaum remarked.

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