National Association of Mutual Insurance Companies Issues Public Comment to DOT

TARGETED NEWS SERVICE (founded 2004) features non-partisan 'edited journalism' news briefs and information for news organizations, public policy groups and individuals; as well as 'gathered' public policy information, including news releases, reports, speeches. For more information contact MYRON STRUCK, editor, editor@targetednews.com, Springfield, Virginia; 703/304-1897; https://targetednews.com

WASHINGTON, Aug. 24 -- Thomas J. Karol, General Counsel - Federal, National Association of Mutual Insurance Companies, Indianapolis, Indiana, has issued a public comment to the U.S. Department of Transportation. The comment was written and posted on Aug. 21, 2023.

The comment, on Docket No. FMCSA-2023-0007, was sent to Robin Hutcheson, Administrator, Federal Motor Carrier Safety Administration.

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On June 21st, 2023, the Federal Motor Carrier Safety Administration ("FMCSA") published in the Federal Register a Notice of proposed rulemaking for the implementation of the statutory exemption from its operating authority registration rules for providers of recreational activities. (the "Notice"). The National Association of Mutual Insurance Companies ("NAMIC") welcomes the opportunity to comments on the Notice.

NAMIC is the largest property/casualty insurance trade group with a diverse membership of more than 1,500 local, regional, and national member companies, including seven of the top ten property/casualty insurers in the United States. NAMIC members lead the personal lines sector representing 55 percent of the auto market. Through our advocacy programs we promote public policy solutions that benefit NAMIC member companies and the policyholders they serve and foster greater understanding and recognition of the unique alignment of interests between management and policyholders of mutual companies.

As background, the Notice provides that Section 23012 of the Infrastructure Investment and Jobs Act (IIJA) (Pub. L. 117-58, 135 Stat. 429 (H.R. 3684, Nov. 15, 2021)) amended 49 U.S.C. 13506 added in paragraph (b)(4), a new exemption from FMCSA's operating authority registration requirements. By the Notice, FMCSA proposes the addition of new regulatory text implementing this statutory exemption. The exemption from operating authority registration applies to motor carriers operating a motor vehicle designed or used to transport between 9 and 15 passengers (including the driver), whether operated alone or with a trailer attached to the transport vehicle, if the motor vehicle is operated by a personthat provides recreational activities and the transportation is provided within a 150 air-mile radius of the location at which passengers initially boarded the motor vehicle at the outset of the trip.

The Notice further provides that, before the enactment of section 23012 of the IIJA, a provider of recreational activities operating as a motor carrier of passengers was required to maintain insurance at the minimum prescribed levelsfor the entire year--including the months during which the provider was not operating. As a result, some providers of recreational activities were voluntarily revoking their operating authority registrationsduring the off-season months by filing Form OCE- 46 so that they did not need to maintain insurance at the minimum prescribed levels during those months.

The Notice then provides that "some motor carriers would no longer need to have evidence of financial responsibility on file with FMCSA (through either Form BMC-91 or BMC-91X). However, the inapplicability of the insurance coverage filing requirement in 49 CFR part 365 and Sec.387.301T does not affect a motor carrier's obligation to maintain minimum levels of financial responsibility as set forth in Sec.387.33."

We are concerned that expanding eligibility for an exemption from federal requirements for insurance coverage for newly defined "recreational activities," even where the transportation contemplated is incidental to the activities, could create confusion for policyholders and may not be administratively possible for insurers. The Notice provides that "Carriers under this scenario would save on insurance costs during the months they are not in operation (such as off-season months)", but as a general matter, insurance coverages are based on lengths of time established by the policy contract, not whether an insured is operating or not.

Additionally, as the proposed rule notes, "motor carriers that are no longer subject to Federal insurance requirements while not in operation may still be required to maintain insurance coverage to meet applicable State requirements in those States in which the motor carrier operates," raising additional opportunities for confusion and the risk of underinsurance as a result of the proposal.

We respectfully suggest that prior to any consideration of a final rule, the FMCSA examine in greater detail the availability of insurance coverage for the newly defined "recreational activities," to determine if insurance companies can provide such coverage on a monthly basis and for which coverage can be stopped and started at reasonable notice periods. FMCSA may also find it useful to determine if any states will permit similar staggering of insurance coverage for such vehicles.

If you have any questions or require further information, please contact me at tkarol@namic.org. Thank you for your time and consideration.

Thomas J. Karol

General Counsel - Federal

National Association of Mutual Insurance Companies

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Original text here: https://downloads.regulations.gov/FMCSA-2023-0007-0006/attachment_1.pdf

TARGETED NEWS SERVICE (founded 2004) features non-partisan 'edited journalism' news briefs and information for news organizations, public policy groups and individuals; as well as 'gathered' public policy information, including news releases, reports, speeches. For more information contact MYRON STRUCK, editor, editor@targetednews.com, Springfield, Virginia; 703/304-1897; https://targetednews.com