Insurer reporting requirements: Insurers required to file report; lists,

[Federal Register: April 7, 2000 (Volume 65, Number 68)]

[Proposed Rules]

[Page 18267-18270]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr07ap00-33]

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 544

[Docket No.: 2000-001; Notice 01]

RIN 2127-AH77

Insurer Reporting Requirements; List of Insurers Required To File Reports

AGENCY: National Highway Traffic Safety Administration (NHTSA), Department of Transportation (DOT).

ACTION: Notice of proposed rulemaking.

SUMMARY: This document proposes to republish, without change, 2 lists of those passenger motor vehicle insurers that are required to file reports on their motor vehicle theft loss experiences and to amend a third list. An insurer included in any of these lists would be required to file a report for the 1997 calendar year before October 25, 2000. If the passenger motor vehicle insurers remain listed, they must submit reports by each subsequent October 25.

DATES: Comments must be submitted not later than June 6, 2000.

ADDRESSES: Comments on this proposed rule must refer to the docket number referenced in the heading of this notice and submit them to: Docket Section, NHTSA, Room 5109, 400 Seventh Street, SW, Washington, DC 20590. Docket hours are 9:30 a.m. to 4:00p.m., Monday through Friday.

FOR FURTHER INFORMATION CONTACT: Dr. Henrietta L. Spinner, Office of Planning and Consumer Programs, NHTSA, 400 Seventh Street, SW, Washington, DC 20590. Dr. Spinner's telephone number is (202) 366-4802. Her fax number is (202) 493-2290.

SUPPLEMENTARY INFORMATION:

Background

Pursuant to 49 U.S.C. 33112, Insurer reports and information, NHTSA requires certain passenger motor vehicle insurers to file an annual report with the agency. Each insurer's report includes information about thefts and recoveries of motor vehicles, the rating rules used by the insurer to establish premiums for comprehensive coverage, the actions taken by the insurer to reduce such premiums, and the actions taken by the insurer to reduce or deter theft. Under the agency's regulation, 49 CFR Part 544, the following insurers are subject to the reporting requirements:

(1) Those issuers of motor vehicle insurance policies whose total premiums account for 1 percent or more of the total premiums of motor vehicle insurance issued within the United States;

(2) Those issuers of motor vehicle insurance policies whose premiums account for 10 percent or more of total premiums written within any one state; and (3) rental and leasing companies with a fleet of 20 or more vehicles not covered by theft insurance policies issued by insurers of motor vehicles, other than any governmental entity.

Pursuant to its statutory exemption authority, the agency exempted certain passenger motor vehicle insurers from the reporting requirements.

1. Small Insurers of Passenger Motor Vehicles

   Section 33112(f)(2) provides that the agency shall exempt small insurers of passenger motor vehicles if NHTSA finds that such exemptions will not significantly affect the validity or usefulness of the information in the reports, either nationally or on a state-by- state basis. The term ``small insurer'' is defined, in Section 33112(f)(1)(A) and (B), as an insurer whose premiums for motor vehicle insurance issued directly or through an affiliate, including pooling arrangements established under state law or regulation for the issuance of motor vehicle insurance, account for less than 1 percent of the total premiums for all forms of motor vehicle insurance issued by insurers within the United States. However, that section also stipulates that if an insurance company satisfies this definition of a ``small insurer,'' but accounts for 10 percent or more of the total premiums for all motor vehicle insurance issued in a particular state, the insurer must report about its operations in that state.

   In the final rule establishing the insurer reports requirement (52 FR 59; January 2, 1987), 49 CFR part 544, NHTSA exercised its exemption authority by listing in Appendix A each insurer that must report because it had at least 1 percent of the motor vehicle insurance premiums nationally. Listing the insurers subject to reporting, instead of each insurer exempted from reporting because it had less than 1 percent of the premiums nationally, is administratively simpler since the former group is much smaller than the latter. In Appendix B, NHTSA lists those insurers required to report for particular states because each insurer had a 10 percent or a greater market share of motor vehicle premiums in those states. In the January 1987 final rule, the agency stated that it would update Appendices A and B annually. NHTSA updates the appendices based on data voluntarily provided by insurance companies to A.M. Best,

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   which A.M. Best publishes in its State/Line Report each spring. The agency uses the data to determine the insurers' market shares nationally and in each state.

2. Self-insured Rental and Leasing Companies

   In addition, upon making certain determinations, NHTSA grants exemptions to self-insurers, i.e., any person who has a fleet of 20 or more motor vehicles (other than any governmental entity) used for rental or lease whose vehicles are not covered by theft insurance policies issued by insurers of passenger motor vehicles, 49 U.S.C. 33112(b)(1) and (f). NHTSA may exempt a self-insurer from reporting, if the agency determines:

   (1) The cost of preparing and furnishing such reports is excessive in relation to the size of the business of the insurer; and

   (2) The insurer's report will not significantly contribute to carrying out the purposes of Chapter 331.

   In a final rule published June 22, 1990 (55 FR 25606), the agency granted a class exemption to all companies that rent or lease fewer than 50,000 vehicles, because it believed that the largest companies' reports sufficiently represent the theft experience of rental and leasing companies. NHTSA concluded that smaller rental and leasing companies' reports do not significantly contribute to carrying out NHTSA's statutory obligations and that exempting such companies will relieve an unnecessary burden on them. As a result of the June 1990 final rule, the agency added Appendix C, consisting of an annually updated list of the self-insurers subject to Part 544. Following the same approach as in Appendix A, NHTSA included, in Appendix C, each of the self-insurers subject to reporting instead of the self-insurers which are exempted. NHTSA updates Appendix C based primarily on information from Automotive Fleet Magazine and Business Travel News.

3. When a Listed Insurer Must File a Report

   Under Part 544, as long as an insurer is listed, it must file reports on or before October 25 of each year. Thus, any insurer listed in the appendices must file a report by October 25, and by each succeeding October 25, absent an amendment removing the insurer's name from the appendices.

   Proposal

   1. Insurers of Passenger Motor Vehicles

      Appendix A lists insurers that must report because each had 1 percent of the motor vehicle insurance premiums on a national basis. The list was last amended in a final rule published on October 25, 1999 (See 64 FR 57393). Based on the 1997 calendar year data from A.M. Best, we are proposing to reissue appendix A without change.

      Each of the 18 insurers listed in Appendix A is required to file a report before October 25, 2000, setting forth the information required by part 544 for each State in which it did business in the 1997 calendar year. As long as these 18 insurers remain listed, they will be required to submit reports by each subsequent October 25 for the calendar year ending slightly less than 3 years before.

      Appendix B lists insurers required to report for particular States for calendar year 1997, because each insurer had a 10 percent or a greater market share of motor vehicle premiums in those States. Based on the 1997 calendar year data for market shares from A.M. Best, we are proposing to reissue Appendix B without change.

      The 11 insurers listed in appendix B are required to report on their calendar year 1997 activities in every State where they had a 10 percent or a greater market share. These reports must be filedby October 25, 2000, and set forth the information required by Part 544. As long as these 11 insurers remain listed, they would be required to submit reports on or before each subsequent October 25 for the calendar year ending slightly less than 3 years before.

   2. Rental and Leasing Companies

      Appendix C lists rental and leasing companies required to file reports. Based on information in Automotive Fleet Magazine and Business Travel News for 1997, NHTSA proposes to remove Penske Truck Leasing Company from Appendix C and to add Ford-Rent-A-Car System to Appendix C. Each of the 19 companies (including franchisees and licensees) listed in Appendix C would be required to file reports for calendar year 1997 no later than October 25, 2000, and set forth the information required by Part 544. As long as those 19 companies remain listed, they would be required to submit reports before each subsequent October 25 for the calendar year ending slightly less than 3 years before.

      Regulatory Impacts

   1. Costs and Other Impacts

      This notice has not been reviewed under Executive Order 12866. NHTSA has considered the impact of this proposed rule and determined that the action is not ``significant'' within the meaning of the Department of Transportation's regulatory policies and procedures. This proposed rule implements the agency's policy of ensuring that all insurance companies that are statutorily eligible for exemption from the insurer reporting requirements are in fact exempted from those requirements. Only those companies that are not statutorily eligible for an exemption are required to file reports.

      NHTSA does not believe that this proposed rule, reflecting current data, affects the impacts described in the final regulatory evaluation prepared for the final rule establishing part 544 (52 FR 59; January 2, 1987). Accordingly, a separate regulatory evaluation has not been prepared for this rulemaking action. Using the Bureau of Labor Statistics Consumer Price Index for 1999, the cost estimates in the 1987 final regulatory evaluation were adjusted for inflation. The agency estimates that the cost of compliance is $83,300 for any insurer added to Appendix A, $33,320 for any insurer added to Appendix B, and $9,613 for any insurer added to Appendix C. If this proposed rule is made final, for Appendices A and B, the agency would make no changes; for Appendix C, the agency would remove one company and add one company. The agency therefore estimates that the net effect of this proposal, if made final, would be no cost to insurers as a group.

      Interested persons may wish to examine the 1987 final regulatory evaluation. Copies of that evaluation were placed in Docket No. T86-01; Notice 2. Any interested person may obtain a copy of this evaluation by writing to NHTSA, Docket Section, Room 5109, 400 Seventh Street, SW, Washington, DC 20590, or by calling (202) 366-4949.

   2. Paperwork Reduction Act

      The information collection requirements in this proposed rule were submitted and approved by the Office of Management and Budget (OMB) pursuant to the requirements of the Paperwork Reduction Act (44 U.S.C. 3501 et seq.). This collection of information is assigned OMB Control Number 2127-0547 (``Insurer Reporting Requirements'') and approved for use through July 31, 2000, and the agency will seek to extend the approval afterwards.

   3. Regulatory Flexibility Act

      The agency also considered the effects of this rulemaking under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). I certify that this proposed rule

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      will not have a significant economic impact on a substantial number of small entities. The rationale for the certification is that none of the companies proposed for Appendices A, B, or C are construed to be a small entity within the definition of the RFA. ``Small insurer'' is defined, in part under 49 U.S.C. 33112, as any insurer whose premiums for all forms of motor vehicle insurance account for less than 1 percent of the total premiums for all forms of motor vehicle insurance issued by insurers within the United States, or any insurer whose premiums within any State, account for less than 10 percent of the total premiums for all forms of motor vehicle insurance issued by insurers within the State. This notice would exempt all insurers meeting those criteria. Any insurer too large to meet those criteria is not a small entity. In addition, in this rulemaking, the agency proposes to exempt all ``self insured rental and leasing companies'' that have fleets of fewer than 50,000 vehicles. Any self insured rental and leasing company too large to meet that criterion is not a small entity.

   4. Federalism

      This action has been analyzed according to the principles and criteria contained in Executive Order 12612, and it has been determined that the proposed rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment.

   5. Environmental Impacts

      In accordance with the National Environmental Policy Act, NHTSA has considered the environmental impacts of this proposed rule and determined that it would not have a significant impact on the quality of the human environment.

      Interested persons are invited to submit comments on the proposal. It is requested but not required that two copies of the comments be submitted. All comments must not exceed 15 pages in length. (49 CFR 553.21). Necessary attachments may be appended to these submissions without regard to the 15-page limit. This limitation is intended to encourage commenters to detail their primary arguments in a concise fashion.

      If a commenter wishes to submit certain information under a claim of confidentiality, two copies of the complete submission, including purportedly confidential business information, should be submitted to the Chief Counsel, NHTSA, at the street address given above, and one copy from which the purportedly confidential information has been deleted should be accompanied by cover letter setting forth the information specified in the agency's confidential business information regulation. (49 CFR part 512).

      All comments received before the close of business on the comment closing date indicated will be considered, and will be available for examination in the docket at the above address both before and after the date. To the extent possible, comments filedafter the closing date will also be considered. Comments received too late for consideration regarding the final rule will be considered as suggestions for further rulemaking action. Comments on the proposal are available for inspection in the docket. NHTSA will continue to file relevant information, as it becomes available in the docket after the closing date. It is recommended that interested persons continue to examine the docket for new material.

      Those persons wanting receipt of their comments in the rule docket should enclose a self-addressed, stamped postcard in the envelope with their comments. Upon receiving the comments, the docket supervisor will return the postcard by mail.

      List of Subjects in 49 CFR Part 544

      Crime insurance, insurance, insurance companies, motor vehicles, reporting and recordkeeping requirements.

      In consideration of the foregoing, 49 CFR Part 544 is proposed to be amended as follows:

      PART 544--[AMENDED]

   1. The authority citation for part 544 is proposed to be revised to read as follows:

      Authority: 49 U.S.C. 33112; delegation of authority at 49 CFR 1.50.

   2. Paragraph (a) of Sec. 544.5 is proposed to be revised to read as follows:

      Sec. 544.5 General requirements for reports.

      (a) Each insurer to which this part applies shall submit a report annually before October 25, beginning on October 25, 1986. This report shall contain the information required by Sec. 544.6 of this part for the calendar year three years previous to the year in which the report is filed(e.g., the report due by October 25, 2000 will contain the required information for the 1997 calendar year). * * * * *

   3. Appendix A to Part 544 is proposed to be republished to read as follows:

      Appendix A--Insurers of Motor Vehicle Insurance Policies Subject to the Reporting Requirements in Each State in Which They Do Business

      Allstate Insurance Group American Family Insurance Group American Financial Group American International Group California State Auto Association CNA Insurance Group Erie Insurance Group Farmers Insurance Group Berkshire Hathaway/GEICO Corporation Group Hartford Insurance Group Liberty Mutual Group Nationwide Group Progressive Group Prudential of America Group State Farm Group Travelers PC Group USAA Group Zurich Insurance Group-U.S.

   4. Appendix B to Part 544 is proposed to be revised to read as follows:

      Appendix B--Issuers of Motor Vehicle Insurance Policies Subject to the Reporting Requirements Only in Designated States

      Alfa Insurance Group (Alabama) Allmerica P & C Companies (Michigan) Arbella Mutual Insurance (Massachusetts) Auto Club of Michigan Group (Michigan) Commerce Group, Inc. (Massachusetts) Commercial Union Insurance Companies (Maine) Concord Group Insurance Companies (Vermont) Kentucky Farm Bureau Group (Kentucky) Nodak Mutual Insurance Company (North Dakota) Southern Farm Bureau Group (Arkansas, Mississippi) Tennessee Farmers Companies (Tennessee)

   5. Appendix C to Part 544 is proposed to be revised to read as follows:

      Appendix C--Motor Vehicle Rental and Leasing Companies (Including Licensees and Franchisees) Subject to the Reporting Requirements of Part 544

      Alamo Rent-A-Car, Inc. ARI (Automotive Rentals, Inc.) Associates Leasing Inc. AT&T Automotive Services, Inc. Avis, Inc. Budget Rent-A-Car Corporation Dollar Rent-A-Car Systems, Inc. Donlen Corporation Enterprise Rent-A-Car Ford Rent-A-Car-System \1\ GE Capital Fleet Services Hertz Rent-A-Car Division (subsidiary of Hertz Corporation) Lease Plan USA, Inc.

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      National Car Rental System, Inc. PHH Vehicle Management Services Ryder System, Inc. (Both rental and leasing operations) U-Haul International, Inc. (Subsidiary of AMERCO) USL Capital Fleet Services Wheels Inc.

      \1\ Indicates a newly listed company which must file a report beginning with the report due October 25, 2000.

      Issued on: April 4, 2000. Stephen R. Kratzke, Acting Associate Administrator for Safety Performance Standards.

      [FR Doc. 00-8663Filed4-6-00; 8:45 am]

      BILLING CODE 4910-59-P