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NY Assembly Leader working to solve combat sports’ $1 million insurance barrier

In an exclusive interview with Bloody Elbow, NY Assembly Leader Joseph Morelle detailed the steps being taken to bring back MMA and boxing promoters to the state after passing a massive liability insurance requirement.

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New York’s controversial $1 million brain-injury insurance requirement could be on the verge of an adjustment, according to the politician who sponsored the bill to legalize MMA in the state. The news comes on the heels of an announcement that the state approved a policy from insurance company AIG to provide coverage for athletes fighting in UFC 205.

UFC officials said the cost will be approximately $1,675 per athlete. The card will feature 13 fights for a total price tag of over $40,000 for the promotion’s big event at Madison Square Garden. And while the UFC may be able to foot that bill, the high premiums have been preventing smaller promotions from holding shows in the state.

“I had a conversation with the Governor’s office and people at the Secretary of State’s office and the state athletic commission about the problem of not having small promoters and boxing in New York and obviously its something that everybody is concerned about,” said Assembly Majority Leader Joseph Morelle, D-Irondequoit, in an exclusive interview with Bloody Elbow. “I don’t think that anyone should feel as though either the legislature or the Governor’s staff doesn’t know that we have a challenge here. Everyone should know that both we and the Governor’s office are taking it seriously and trying to look for some solution.”

The insurance requirement, which provides up to a million dollars in insurance coverage in the event of a life-threatening brain injury, was part of a law passed earlier this year legalizing MMA in New York for the first time in nearly twenty years. The brain-injury insurance is required in addition to premiums for general medical coverage. According to Morelle, finding out the actual cost of the insurance was the first step toward making a change.

“The state athletic commission could now say, ‘Well this is not affordable for small promoters and so we are going to make an adjustment to the coverage.’ That is allowed in the law…and hopefully they will begin to have that conversation,” said the Assembly Majority Leader.

Morelle further explained that he would face an uphill battle trying to change the requirement in the law amid a divisive legislature, hesitant to legalize the sport in the first place. He has instead looked to the New York State Athletic Commission to make the change, saying that he intentionally inserted language into the bill giving the commission the authority to adjust the requirement in the event that it became impractical or cost-prohibitive. Last August, the NYSAC approved the requirement, despite protests from local boxing and MMA promoters who said it would be unaffordable.

When asked whether the New York commission is competent to exercise its authority to adjust the insurance requirement, Morelle said the Governor’s office is working feverishly to restructure the makeup of the commission.

“I’m speaking to the Governor’s office and people who are working on oversight of these agencies. I spoke to them two days ago and they are continuing to consider names for the athletic commission,” he said. “This is a priority for them and they are trying to make sure that they’ve identified the best candidates to run the athletic commission. They are trying to make sure they get it right. They clearly know this is an issue that has to be addressed and they are working as swiftly as they can.”

As to who might be considered for the restructured NYSAC, Morelle said MMA referee and New York based attorney Thomas Sconzo is one of the names being looked at for a spot on the commission. Sconzo also owns the New York Fight Exchange, a local mma promotion that has voiced its opposition to the high premiums for the brain-injury insurance.

Presently, NYSAC’s five person commission is operating with two vacant seats, an interim chair and two holdover commissioners who were criticized in a state Inspector General report, released this past July. The report unveiled widespread corruption within the commission. It also deemed the commission’s “practices, policies and procedures” to be “either nonexistent or deficient, specifically those relating to post-bout medical care, tactical emergency plans and communication, and training.” The Inspector General launched its investigation following an incident in 2013, when Russian boxer Magomed Abdusalamov sustained a life-threatening brain injury during a fight at MSG, which left him paralyzed.

Addressing recent concerns over fighter safety in the state, under the supervision of an incomplete commission, Morelle said:

“Obviously we are moving ahead, and the statute as it relates to neurological examinations, as it relates to time-out periods…all that goes on whether there’s two commissioners or five commissioners. But, the best situation would be a full commission, a breadth of experience and a commission chair that’s in place working full-time and that’s what we’re working hard to try to achieve. “

Up until now, the exact origin of the $1 million insurance requirement has been a mystery, shrouded in speculation. However, Morelle revealed that Governor Andrew Cuomo’s office played a role in inserting the requirement into the bill and that it stemmed from Abdusalamov’s injury, which led to a pending lawsuit against the state of New York.

“The whole point of these provisions were partly to address a circumstance that happened with a Russian boxer in New York,” he said. “He had a life threatening brain injury as a result of a boxing match. We wanted to make sure that that didn’t happen any longer. The Governor’s office wanted to make sure that there was coverage in the event that that happened. That’s why that provision exists.”

Abdusalamov’s lawyer Paul Edelstein lambasted the requirement as a shield to protect the state from future liability that, “doesn’t provide one measure of protection” for the athletes. He also claimed fighters “are exposed to the very same risks Mago was exposed to without addressing any of the deficiencies” in commission procedures that he believes led to Abdusalamov’s injury.

Abdusalamov’s injury troubled MMA bill supporters and opponents, Morelle told Bloody Elbow. A number of legislators, including Assemblyman Herman D. Farrell Jr., D- Manhattan, expressed concern over insurance coverage for brain-injuries, leading Morelle to add the $1 million requirement as a late amendment, to get the votes necessary to pass the bill.

“There were several other members who expressed the same concerns…” he said. “I think that change in the statute, brought in a whole number of votes.”

However, some have said the brain-injury insurance requirement contains a legislatively narrow definition of “life-threatening” and lacks coverage for slow brain bleeds that surface over the course of two days.

“If you tell me…that a low probability, high-impact event is that expensive, you know I haven’t met with anybody in the insurance industry,” Morelle said. “I haven’t looked at what the cost would be and I haven’t looked at the premium structure.”

At least one NYSAC insider has called the $1 million requirement an arbitrary number that was not well researched or thought out. In a story that aired this past September on AXS-TV’s Inside MMA, former NYSAC executive director David Berlin said he notified the Governor’s office that the premiums would be unaffordable at the time they were proposed. He also claimed he warned government officials that the requirement would lead to the death of boxing in NY, but was largely ignored. Shortly after protesting the requirement, Berlin was demoted from his post. His removal became a source of controversy due to the timing, occurring shortly after he reported unethical behavior by former NYSAC chair Tom Hoover.

Berlin’s warnings foreshadowed the present predicament. Last week, famed boxing promoter Lou DiBella cancelled all scheduled boxing shows in the state for the remainder of the year, calling the insurance requirement “a disgraceful abuse of legislative and state power.”

In August, DiBella co-authored a letter to the Department of State with boxing promoter Joe DeGuardia, claiming boxing is “under an immediate danger of extinction.” There has not been a professional boxing match in the state since August. Smaller MMA promotions have also said that they cannot afford to hold events in the state due to the high premiums associated with the policy.

Meanwhile, Morelle has defended the coverage levels.

“The levels were decided after a conversation with a number of people, including the Governor’s office and the ability to adjust those premiums is also in the bill…,” he said. “We did it to protect the combatants, to make sure that they were kept safe. We would like to have as much coverage in the unlikely event that something very very bad happens in the ring….I just don’t want it to be seen as, ‘well it was necessary just to pass the bill,’ well it was but it was also something that was welcomed by most of the supporters of the legislation….The fact that the premiums may be unaffordable for smaller promoters is an unfortunate side effect.”

Bob Arum, CEO of Boxing’s Top Rank, accused the UFC of intentionally lobbying for the high insurance requirement in the MMA bill, as a mechanism to freeze other promotions out of the state, according to ESPN. Veteran boxing journalist Tom Hauser has suggested that at least one federal investigation is examining suspicious circumstances surrounding the passage of the MMA bill and the timing of the release of the Inspector General report criticizing the NYSAC. Hauser stated that one witness was asked whether there may have been efforts to favor the UFC. Morelle worked closely with the UFC to get the bill passed and denied any collusion to lock out competing promotions. He also said he has no knowledge of any federal investigations surrounding the MMA bill.

“Any suggestion of that is just wrong, because it had nothing to do with it,” he said. “The smaller promotions and boxing and MMA are all things that we want to help all of our regions, particularly in small cities like Utica and Syracuse and Albany and Rochester. Boxing is important to us, MMA is important to us.”

Morelle claimed he is “absolutely” committed to bringing boxing and smaller promotions back to New York and has been working vigorously with the Governor’s office and NYSAC to remedy the problem.

“I’m always leery of timetables,” he said. “But we obviously would like to do this so that people who are preparing for cards in 2017 will look back to New York. But we gotta address this and make sure we get it right.…It is something we are in ongoing conversations about.”