Insurer reporting requirements: Insurers required to file reports; list,

[Federal Register: August 14, 2000 (Volume 65, Number 157)]

[Rules and Regulations]

[Page 49505-49507]

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

[DOCID:fr14au00-17]

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 544

[Docket No.: 2000-001; Notice 02]

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: Final rule.

SUMMARY: This final rule updates the lists of passenger motor vehicle insurers that are required to file reports on their motor vehicle theft loss experiences, pursuant to 49 U.S.C. 33112. Each insurer listed must file a report for the 1997 calendar year not later than October 25, 2000.

DATES: Effective Date: The final rule is effective August 14, 2000.

Reporting Date: Insurers listed in the appendices are required to submit three copies of their reports on CY 1997 experience on or before October 25, 2000. Previously listed insurers whose names are removed by this notice need not submit reports for CY 1997. Insurers newly listed in this final rule must submit their reports for calendar year 1997 on or before October 25, 2000. Under Part 544, as long as an insurer is listed, it must file reports each October 25. Thus, any insurer listed in the appendices as of the date of the most recent final rule must file a report on the following October 25, and on each succeeding October 25, absent a further amendment removing the insurer's name from the appendices.

FOR FURTHER INFORMATION CONTACT: Ms. Deborah Mazyck, Office of Planning and Consumer Programs, NHTSA, 400 Seventh Street, SW., Washington, DC 20590. Ms. Mazyck's telephone number is (202) 366-4809. 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 implementing 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 has exempted smaller 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 agency may not, however, exempt an insurer under this section if it is considered an insurer only because of section 33112(b)(1); that is, if it is a self-insurer. 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.

   As provided in 49 CFR part 544, NHTSA exercises its exemption authority by listing in Appendix A each insurer which must report because it had at least 1 percent of the motor vehicle insurance premiums nationally.

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   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 that are 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 establishing part 544 (52 FR 59, January 2, 1987), the agency stated that Appendices A and B will be updated annually. It has been NHTSA's practice to update the appendices based on data voluntarily provided by insurance companies to A.M. Best, and made available for the agency 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 is authorized to grant exemptions to self-insurers, defined in 49 U.S.C. 33112(b)(1) as any person who has a fleet of 20 or more motor vehicles (other than any governmental entity) which are used primarily for rental or lease and which are not covered by theft insurance policies issued by insurers of passenger motor vehicles. Under 49 U.S.C. 33112(e)(1) and (2), 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 reports from only the largest companies would sufficiently represent the theft experience of rental and leasing companies. NHTSA concluded those reports by the many smaller rental and leasing companies do not significantly contribute to carrying out NHTSA's statutory obligations and that exempting such companies will relieve an unnecessary burden on most companies that potentially must report. As a result of the June 1990 final rule, the agency added a new Appendix C that consists of an annually updated list of the self-insurers that are subject to part 544.

   Following the same approach, as in the case of Appendix A, NHTSA has included, in Appendix C, each of the relatively few self-insurers subjected to reporting instead of relatively numerous self-insurers exempted. NHTSA updated Appendix C based primarily on information from the publications, Automotive Fleet Magazine and Business Travel News.

   Notice of Proposed Rulemaking

   1. Insurers of Passenger Motor Vehicles

      On April 7, 2000, NHTSA published a notice of proposed rulemaking (NPRM) to update the list of insurers in Appendices A, B, and C required to file reports (65 FR 18267). Appendix A of the NPRM listed those insurers which must report because each had at least 1 percent of the motor vehicle insurance premiums on a national basis. The list was last amended in a notice published on October 25, 1999 (See 64 FR 57393). Based on the 1997 calendar year data from A.M. Best, NHTSA proposed to reissue Appendix A without change.

      Under part 544, each of the 18 insurers listed in Appendix A of the NPRM would have been required to file a report not later than 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 those 18 insurers remain listed, they would be required to submit reports by each subsequent October 25 for the calendar year ending slightly less than 3 years before.

      Appendix B of the NPRM listed those insurers that would be 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 A.M. Best's data for market shares, NHTSA proposed to reissue Appendix B without change.

      Under part 544, each of the 11 insurers listed in Appendix B of the NPRM would have been required to report no later than October 25, 2000 on their calendar year 1997 activities in every state in which they had a 10 percent or greater market share, and set forth the information required by Part 544. As long as those 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

      Based on information in Automotive Fleet Magazine and Business Travel News for 1997, the most recent year for which data are available, NHTSA proposed one change in Appendix C. As indicated above, that appendix lists rental and leasing companies required to file reports. Based on the data reported in the above mentioned publications, NHTSA proposed to remove the Penske Truck Leasing Company from Appendix C and add Ford Rent-A-Car System to Appendix C.

      Under part 544, each of the 19 companies (including franchisees and licensees) listed in Appendix C would have been 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 on or before each subsequent October 25 for the calendar year ending slightly less than 3 years before.

      Public Comments on Final Determination

   1. Insurers of Passenger Motor Vehicles

      In response to the NPRM, the agency received no comments. Accordingly, this final rule adopts the proposed changes to Appendices A, B, and C.

      Regulatory Impacts

   1. Costs and Other Impacts

      This notice has not been reviewed under Executive Order 12866. NHTSA has considered the impact of this final rule and has determined the action not to be ``significant'' within the meaning of the Department of Transportation's regulatory policies and procedures. This 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 rule, reflecting more 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. In this final rule, for Appendix A, the agency made no changes; for Appendix B, the agency made no changes; and for Appendix C, the agency would add one company and remove one company. The

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      agency therefore estimates that the net effect of this final rule will be no cost to insurers, as a group.

   2. Paperwork Reduction Act

      The information collection requirements in this final rule have been submitted to 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 was assigned OMB Control Number 2127-0547 (``Insurer Reporting Requirements'') and was approved for use through August 31, 2003.

   3. Regulatory Flexibility Act

      The agency has also considered the effects of this rulemaking under the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). I certify that this final rule would not have a significant economic impact on a substantial number of small entities. The rationale for the certification is that none of the companies included in Appendices A, B, or C would be 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 final 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 final rule and determined that it would not have a significant impact on the quality of the human environment.

   6. Civil Justice Reform

      This final rule does not have any retroactive effect, and it does not preempt any State law, 49 U.S.C. 33117 provides that judicial review of this rule may be obtained pursuant to 49 U.S.C. 32909, section 32909 does not require submission of a petition for reconsideration or other administrative proceedings before parties may file suit in court.

      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 amended as follows:

      PART 544--[AMENDED]

   1. The authority citation for part 544 continues 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 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 not later than 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 would contain the required information for the 1997 calendar year).

   3. Appendix A to Part 544 is revised 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 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 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 Systems, Inc.,\1\ GE Capital Fleet Services, Hertz Rent-A-Car Division (subsidiary of Hertz Corporation), Lease Plan USA, Inc., 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 on October 25, 2000.

      Issued on: August 8, 2000. Stephen R. Kratzke, Associate Administrator for Safety Performance Standards.

      [FR Doc. 00-20480Filed8-11-00; 8:45 am]

      BILLING CODE 4910-59-P