Insurer reporting requirements: Insurers required to file reports; list,
[Federal Register: October 25, 1999 (Volume 64, Number 205)]
[Rules and Regulations]
[Page 57393-57397]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25oc99-7]
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Part 544
[Docket No.: 99-001; Notice 02]
RIN 2127-AH62
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 in Appendices A, B, and C of Part 544 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 1996 calendar year not later than October 25, 1999.
DATES: This final rule is effective October 25, 1999.
Reporting Date: Insurers listed in the appendices are required to submit their reports on CY 1996 experience on or before October 25, 1999. Previously listed insurers whose names are removed by this notice need not submit reports for CY 1996. Insurers newly listed in this final rule must submit their reports for calendar year 1996 on or before October 25, 1999. 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. Henrietta L. Spinner, Office of Planning and Consumer Programs, NHTSA, 400 Seventh Street, SW, Washington, DC 20590. Ms. 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
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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.
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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. 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.
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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
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Insurers of Passenger Motor Vehicles
On May 14, 1999, NHTSA published a notice of proposed rulemaking (NPRM) to update the list of insurers in Appendices A, B, and C required to file reports (64 FR 26352). Based on the 1996 calendar year A.M. Best data for market shares, NHTSA proposed to amend the listing in Appendix A of 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 December 18, 1998 (See 63 FR 70051). Three companies, Aetna Life & Casualty Group, Safeco Insurance Companies, and Travelers Insurance Group, were proposed to be removed from Appendix A. One company, Travelers PC Group, was proposed to be added.
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, 1999, setting forth the information required by Part 544 for each State in which it did business in the 1996 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 1996, because each insurer had a 10 percent or a greater market share of motor vehicle premiums in those States. Based on the 1996 calendar year A.M. Best's data for market shares, it was proposed that Island Insurance Group, reporting on its activities in the State of Hawaii be removed from Appendix B.
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, 1999, on their calendar year 1996 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.
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Rental and Leasing Companies
Based on information in Automotive Fleet Magazine and Business Travel News for 1996, the most recent year for which data are available, NHTSA proposed one change in Appendix C. As
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indicated above, that appendix lists rental and leasing companies required to file reports. Based on the data reported in the above mentioned publications, it proposed that one rental and leasing company, Citicorp Bankers Leasing Corporation, be removed from 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 1996 no later than October 25, 1999, 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
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Insurers of Passenger Motor Vehicles
In response to the NPRM, the agency received two comments. Both commentors were companies listed in the May 1999 NPRM. Each commentor questioned the appropriateness of its inclusion in one of the appendices.
Travelers Property Casualty Corporation (Travelers) wrote to request that it not be included in Appendix A. As stated, NHTSA's proposal to include Travelers was based on market share data provided by A.M. Best. Travelers wrote that it was created following the purchase by Travelers of Aetna Life and Casualty's property casualty business on April 2, 1996. Since Traveler's acquisition of Aetna in 1996, the companies have integrated its auto insurance products, reentered some states from which each had previously withdrawn, and achieved solid growth under the Travelers Property Casualty Corporation banner. The insurer, Travelers, believes that because the business was not consolidated until 1999, compiling the data required for reporting for the years prior to CY 1999 would be extremely burdensome, and in some cases, it might not even be possible.
The agency notes Travelers request for an exemption from the October 25, 1999, 2000 and 2001 insurer reporting requirements. However, the agency does not believe that Travelers meets any of the exemption requirements provided under U.S.C. 33112(e)(1) and (2). The agency does not believe that the cost of preparing and furnishing this report will be excessive in relation to the size of the insurer's business. Additionally, the agency believes that because Travelers' insurer information would contribute significally to the agency's statutory requirements, it should submit a report of its CY 1996 insurer information and adhere to the reporting requirements for any subsequent years it is required to report. Since Travelers does not meet the criteria for exemption, NHTSA determines that Travelers should remain listed on Appendix A. Additionally, the agency was subsequently notified that the GEICO Corporation Group, an insurance entity, became a wholly owned subsidiary of Berkshire Hathaway Inc. Therefore, both names will be listed on Appendix A, but the GEICO Corporation Group will continue to report for purposes pursuant to 49 U.S.C. 33112.
Nodak Mutual Insurance Company (Nodak) in North Dakota wrote to request that it not be listed in Appendix B. Nodak indicated that it is not the largest writer of automobiles in the state of North Dakota, although it is the largest property/casualty insurer in that state. The insurer stated that the subject report relates strictly to automobiles, and, therefore, it does not feel the company is in the best position to make comments on stolen vehicles. Nodak stated that it has few auto theft claims, and it does not have any great bearing on the statistics. For instance, in calendar years 1994 and 1995, Nodak reported 14 and 18 stolen vehicles respectively. It believes that the small amount of the vehicles stolen affecting its company would have no bearing on nationwide statistics. Further, Nodak feels that the efforts they would take to acquire statistics of this nature would be an undue hardship considering the lack of effect its information would have on the statistical data gathered nationwide. Finally, Nodak stated that it is a small company and is not in a position to take steps on a nationwide basis to promote programs that deter theft.
The agency notes Nodaks' rationale that its auto theft has declined over the past year and the undue hardship it believes it will endure to provide the required insurer information. The agency also notes Nodak's comment that it believes it is not in the best position to comment on stolen vehicles because while it is the largest property/casualty insurer in North Dakota, it is not the largest writer of automobiles in the state of North Dakota. Therefore, Nodak requests to be exempted from further insurer reporting requirements. However, the agency has determined that the exemption authority provided in section 33112(e)(1) and (2) should not be applied to this insurer. Nodak does not qualify as a ``small insurer'' because its total premiums written exceed 10 percent of the total written in North Dakota. As defined by 49 U.S.C. 33112(f)(1)(B), a small insurer means an insurer whose premiums for motor vehicle insurance account for less than 10 percent of the total premiums for all forms of motor vehicle insurance issued by the insurers in any State. Section 33112 provides that if an insurance company satisfies the section's definition of small insurer nationally, but accounts for 10 percent or more of the total premiums for all forms of motor vehicle insurance issued by insurers within a particular State, such insurer must report this information about its operation in that State. Additionally, the agency believes that the cost of preparing and furnishing this report would not be excessive in relation to the size of the insurers' business. The agency also notes that there have been several other companies similar in premium size for a given State who have experienced anywhere from none to a very few thefts and have continued to provide the required insurer information in a timely fashion. Therefore, because the agency believes that the submission of Nodaks' required information will not be excessive in relation to the size of its business, and that its report will contribute to carrying out the agency's statutory requirements, the agency has determined that the Nodak Mutual Insurance Company should remain on Appendix B.
After reviewing the public comments and in making the appropriate adjustment to Appendix B, NHTSA has determined that each of the 18 insurers listed in Appendix A, each of the 11 insurers in Appendix B, and each of the 19 insurers listed in Appendix C, are required to submit an insurer report under Part 544. Each listed insurer must report on its experience for calendar year 1996, and set forth the information required by 49 CFR part 544.
Regulatory Impacts
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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
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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 cost estimates in the 1987 final regulatory evaluation, the agency estimates that the cost of compliance will be about $50,000 for any insurer added to Appendix A, about $20,000 for any insurer added to Appendix B, and about $5,770 for any insurer added to Appendix C. In this final rule, for Appendix A, the agency would add one insurer and remove three insurers; for Appendix B, the agency would remove one insurer; and for Appendix C, the agency would remove one company. The agency therefore estimates that the net effect of this final rule will be a cost decrease to insurers, as a group of approximately $125,770.
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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 July 31, 2000.
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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.
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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.
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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.
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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]
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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.
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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, 1999 would contain the required information for the 1996 calendar year). * * * * *
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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 GEICO Corporation Group Hartford Insurance Group Liberty Mutual Group Nationwide Group Progressive Group Prudential of America Group State Farm Group Travelers PC Group \1\
\1\ Indicates a newly listed company which must file a report beginning with the report due on October 25, 1999.
USAA Group Zurich Insurance Group-U.S.
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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)
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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. A T & T Automotive Services, Inc. Avis, Inc. Budget Rent-A-Car Corporation Dollar Rent-A-Car Systems, Inc. Donlen Corporation Enterprise Rent-A-Car GE Capital Fleet Services Hertz Rent-A-Car Division (subsidiary of Hertz Corporation) Lease Plan USA, Inc. National Car Rental System, Inc. Penske Truck Leasing Company PHH Vehicle Management Services
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Ryder System, Inc. (Both rental and leasing operations) U-Haul International, Inc. (Subsidiary of AMERCO) USL Capial Fleet Services Wheels Inc.
Issued on: October 15, 1999. Stephen R. Kratzke, Acting Associate Administrator for Safety Performance Standards.
[FR Doc. 99-27514Filed10-22-99; 8:45 am]
BILLING CODE 4910-59-P
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