National Conference of Insurance Legislators Adopts Peer-To-Peer Car Sharing Program Model Act

MANASQUAN, New Jersey, Feb. 4 -- The National Conference of Insurance Legislators issued the following news release:

During the 2019 NCOIL Annual Meeting in Austin, TX, the organization adopted the NCOIL Peer-to-Peer Car Sharing Program Model Act sponsored by Kentucky Representative Bart Rowland, 2020 Chair of the NCOIL Workers' Compensation Insurance Committee. The Model passed without objection by the Property & Casualty Insurance Committee and the NCOIL Executive Committee.

The Property & Casualty Insurance Committee had been discussing the growing sharing economy in general for several years. In 2015, NCOIL passed groundbreaking TNC legislation for ridesharing companies such as Uber & Lyft, which has passed either in whole or in part in nearly every state. This peer-to-peer car sharing model legislation was first discussed thoroughly at the 2019 Summer Meeting in Newport Beach, CA. Sensing that both the peer-to-peer car sharing and insurance industries were in agreement with several issues, the Committee, and NCOIL as a whole, acted in an expeditious manner to ensure that a Model was ready for states to consider adopting in 2020 legislative sessions.

KY Rep. Bart Rowland stated, "With the rise of collaborative consumption and sharing, it is important that the insurance industry keep up and create trust between the consumers and companies. If you pay someone to have access to transportation, there is a base level of safety that people expect. The car sharing industry must work in conjunction with legislators and regulators to properly accommodate the sharing economy. I am proud to sponsor this Model and commend NCOIL for taking the lead on this issue. Good public policy requires putting parameters in place for these rapidly emerging platforms and technologies."

A document previously negotiated between peer-to-peer car sharing companies and the American Property Casualty Insurance Association (APCIA) had served as the basis for peer-to-peer car sharing legislation enacted in some states. Rep. Rowland decided to use that document as the basis for the first draft of the Model.

"Since several states are looking to adopt legislation on this issue in 2020, it was crucial that NCOIL move quickly. It is also important to remember that this is a Model. Every state is going to have its own process for tailoring it to accommodate the particular needs of that state. The Model provides states the vehicle for that debate," stated Commissioner Tom Considine, NCOIL CEO. "I applaud the peer-to-peer companies and the insurance industry for coming together with legislators and creating a great framework on how insurance for the car sharing economy is handled. NCOIL thanks Rep. Rowland for his leadership in developing very positive public policy on this issue," continued Commissioner Considine.

During drafting discussions, NCOIL legislators and staff worked closely with interested parties such as: Turo, APCIA, Enterprise Holdings, Allstate, the National Association of Mutual Insurance Companies (NAMIC), State Farm, and Getaround.

During drafting discussions, KY Rep. Rowland took the lead in bringing forth an amendment to the Model in the form of a "Scope" section in order to clarify what NCOIL's intent as an organization is when it comes to legislation such as peer-to-peer car sharing. The "Scope" section states, "This Act is intended to govern the intersection of peer-to-peer car services and the state-regulated business of insurance. Nothing in this Act shall be construed to extend beyond insurance or have any implications for other provisions of the code of this state, including but not limited to, those related to motor vehicle regulation, airport regulation, or taxation." This amendment proved vital in getting both the peer-to-peer car sharing and insurance industries to support the Model. "The I in NCOIL does stand for insurance, after all. We understand that legislators and regulators may need to deal with other policy issues impacted by this peer-to-peer auto business," concluded Commissioner Considine.

Highlights of the Model include the requirement that a peer-to-peer car sharing program ensure that, during each car sharing period, the shared vehicle owner and the shared vehicle driver are insured under a motor vehicle liability insurance policy that provides insurance coverage in amounts no less than the minimum amounts set forth in state minimum coverage statutes; the requirement that a peer-to-peer car sharing program assume liability of a shared vehicle owner for bodily injury or property damage to third parties or uninsured and underinsured motorist or personal injury protection losses during the car sharing period in an amount stated in the peer-to-peer car sharing program agreement which amount may not be less than those set forth in a State's financial responsibility law; the requirement of the peer-to-peer car sharing program to notify the shared vehicle owner if the shared vehicle has a lien against it; exclusions in motor vehicle liability insurance policies may exclude any and all coverage and the duty to defend or indemnify for any claim afforded under a shared vehicle owner's motor vehicle insurance policy; recordkeeping requirements for peer-to-peer car sharing programs pertaining to the use of a vehicle; consumer protection disclosure requirements for peer-to-peer car sharing programs such as the daily rate, fees, and if applicable, any insurance or protection package costs that are charged to the shared vehicle owner or the shared vehicle driver; driver's license verification and data retention requirements; requiring sole responsibility of the peer-to-peer car sharing program for any equipment, such as a GPS system or other special equipment put in or on the vehicle to monitor or facilitate the car sharing transaction; and reporting requirements related to automobile safety recalls for both shared vehicle owners and peer-to-peer car sharing programs.

A full copy of the Model (http://ncoil.org/wp-content/uploads/2020/02/P2P-Car-Sharing-Model-release-FINAL.pdf).