Federal Register: August 17, 2009 (Volume 74, Number 157)
DOCID: fr17au09-12 FR Doc E9-19587
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
CFR Citation: 49 CFR Part 544
Docket ID: [Docket No. NHTSA-2009-0050]
RIN ID: RIN 2127-AK46
NOTICE: PROPOSED RULES
DOCID: fr17au09-12
DOCUMENT ACTION: Notice of proposed rulemaking.
SUBJECT CATEGORY:
Insurer Reporting Requirements; List of Insurers Required To File Reports
DATES: Comments must be submitted not later than October 16, 2009.
DOCUMENT SUMMARY:
This document proposes to amend Appendices A, B and C of 49 CFR Part 544, Insurer Reporting Requirements. The appendices list those passenger motor vehicle insurers that are required to file reports on their motor vehicle theft loss experiences. An insurer included in any of these appendices would be required to file three copies of its report for the 2006 calendar year before October 25, 2009. If the passenger motor vehicle insurers remain listed, they must submit reports by each subsequent October 25. We are proposing to add and remove several insurers from relevant appendices.
SUMMARY:
Insurer Reporting Requirements; List of Insurers Required to File Reports
SUPPLEMENTAL INFORMATION
I. 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) 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) 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.
A. 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 stateby 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 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 [[Page 41363]]
companies to A.M. Best.\1\ 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.
\1\ A.M. Best Company is a wellrecognized source of insurance
company ratings and information. 49 U.S.C. 33112(i) authorizes NHTSA
to consult with public and private organizations as necessary. B. SelfInsured Rental and Leasing Companies
In addition, upon making certain determinations, NHTSA grants
exemptions to selfinsurers, 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). Under 49 U.S.C. 33112(e)(1) and (2), NHTSA may
exempt a selfinsurer 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 33112(e)(1) and (2),
(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 selfinsurers subject to Part 544. Following the same approach as in Appendix A, NHTSA included, in Appendix C, each of the selfinsurers subject to reporting instead of the selfinsurers which are exempted.
NHTSA updates Appendix C based primarily on information from Automotive Fleet Magazine and Auto Rental News.\2\
\2\ Automotive Fleet Magazine and Auto Rental News are
publications that provide information on the size of fleets and market share of rental and leasing companies.
C. 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 before October 25, and by each
succeeding October 25, absent an amendment removing the insurer's name from the appendices.
II. 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 August 18, 2008 (73 FR 48151). Based on the 2006 calendar year data market shares from A. M. Best, NHTSA proposes to remove Auto Club Southern California Group and add Auto Club Enterprise Insurance Group to Appendix A.
Each of the 19 insurers listed in Appendix A are required to file a report before October 25, 2009, setting forth the information required by Part 544 for each State in which it did business in the 2006 calendar year. As long as these 19 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 2006, because each insurer had a 10 percent or greater market share of motor vehicle premiums in those States. Based on the 2006 calendar year data for market shares from A.M. Best, we propose to remove Farm Bureau of Idaho from Appendix B.
The eight remaining insurers listed in Appendix B are required to report on their calendar year 2006 activities in every State where they had a 10 percent or greater market share. These reports must be filed by October 25, 2009, and set forth the information required by Part 544. As long as these eight 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. Subsequent to publishing the August 18, 2008 final rule (see 73 FR 48151), the agency was informed by Emkay, Inc., (Emkay) that it was a motor vehicle leasing company offering financial, fleet management and consulting services pertaining to operating a fleet of motor vehicles and does not provide insurance policies for its customers to purchase. However, Emkay further stated that it does include as a condition of its lease agreement that its lessees purchase and maintain its own motor vehicle insurance coverage. Emkay also submitted a copy of its lease agreement showing that insurance was required as a condition of the lease. Therefore, NHTSA proposes to remove Emkay, Inc. from the list of insurers required to meet the reporting requirements.
Each of the remaining six companies (including franchisees and
licensees) listed in Appendix C are required to file reports for
calendar year 2006 no later than October 25, 2009, and set forth the
information required by Part 544. As long as those six 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.
III. 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 2008 (see http://www.bls.gov/cpi),
the cost estimates in the 1987 final regulatory evaluation were
adjusted for inflation. The agency estimates that the cost of
compliance is $107,650 for any insurer added to Appendix A, $43,060 for
any insurer added to Appendix B, and $12,423 for any insurer added to
Appendix C. If this proposed rule is made final, for Appendix A, the
agency would propose to remove one company and add one company; for
Appendix B, the agency would propose to remove one company; and for
Appendix C, the agency would propose to remove one company. The agency
estimates that the net effect of this proposal, if made final, would be a cost decrease of
[[Page 41364]]
approximately $55,483 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. T8601; Notice 2. Any interested person may obtain a copy of this evaluation by writing to NHTSA, Technical Reference Division, 1201 New Jersey Avenue, SE., East Building, Ground Floor, Room E12100, Washington, DC 20590, or by calling (202) 3662588.
2. Paperwork Reduction Act
The information collection requirements in this proposed rule were submitted to 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 21270547 (``Insurer Reporting Requirements'').
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 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 ``selfinsured 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.
6. Regulation Identifier Number (RIN)
The Department of Transportation assigns a regulation identifier number (RIN) to each regulatory action listed in the Unified Agenda of Federal Regulations. The Regulatory Information Service Center publishes the Unified Agenda in April and October of each year. You may use the RIN contained in the heading, at the beginning, of this document to find this action in the Unified Agenda.
7. Plain Language
Executive Order 12866 and the President's memorandum of June 1,
1998, require each agency to write all rules in plain language.
Application of the principles of plain language includes consideration of the following questions:
If you have any responses to these questions, you can forward them to me several ways:
a. Mail: Carlita Ballard, Office of International Policy, Fuel Economy and Consumer Programs, NHTSA, 1200 New Jersey Avenue, SE., (West Building), Washington, DC 20590;
b. Email: Carlita.Ballard@dot.gov; or
c. Fax: (202) 4932990.
IV. Comments
Submission of Comments
1. How Can I Influence NHTSA's Thinking on This Proposed Rule?
In developing our rules, NHTSA tries to address the concerns of all our stakeholders. Your comments will help us improve this rule. We invite you to provide views on our proposal, new data, a discussion of the effects of this proposal on you, or other relevant information. We welcome your views on all aspects of this proposed rule. Your comments will be most effective if you follow the suggestions below:
2. How Do I Prepare and Submit Comments?
Your comments must be written in English. To ensure that your comments are correctly filed in the Docket, please include the docket number of this document in your comments.
Your comments must not exceed 15 pages long (49 CFR 553.21). We established this limit to encourage you to write your primary comments concisely. You may attach necessary documents to your comments. We have no limit on the attachments' length.
Please submit two copies of your comments, including the attachments, to Docket Management at the address given above under ADDRESSES.
Comments may also be submitted to the docket electronically by logging onto the Federal eRulemaking Portal Web site at
http:www.regulations.gov. Follow the online instructions for submitting comments.
3. How Can I Be Sure That My Comments Were Received?
If you wish Docket Management to notify you, upon its receipt of your comments, enclose a selfaddressed, stamped postcard in the envelope containing your comments. Upon receiving your comments, Docket Management will mail the postcard.
4. How Do I Submit Confidential Business Information?
If you wish to submit any information under a confidentiality
claim, you should submit three copies of your complete submission,
including the information you claim as confidential business
information, to the Chief Counsel, Office of Chief Counsel, NHTSA, 1200
New Jersey Avenue, SE., West Building, Washington, DC 20590. In
addition, you should submit two copies, from which you have deleted the
claimed confidential business information, to Docket Management at the
address given above under ADDRESSES. When you send a comment containing information claimed to be
[[Page 41365]]
confidential business information, you should include a cover letter
addressing the information specified in our confidential business information regulation (49 CFR Part 512).
5. Will the Agency Consider Late Comments?
NHTSA will consider all comments that Docket Management receives before the close of business on the comment closing date indicated above under DATES. To the extent possible, we will also consider comments that Docket Management receives after that date. If Docket Management receives a comment too late for us to consider in developing a final rule (assuming that one is issued), we will consider that comment as an informal suggestion for future rulemaking action. 6. How Can I Read the Comments Submitted by Other People?
You may read the comments received by Docket Management at the address given above under ADDRESSES. The hours of the Docket are indicated above, in the same location. You may also see the comments on the Internet. To read the comments on the Internet, log onto the Federal eRulemaking Portal at http://www.regulations.gov. V. Conclusion
Based on the foregoing, we are proposing to amend Appendices A and C of 49 CFR Part 544, Insurer Reporting Requirements. We are also amending Sec. 544.5 to revise the example given the recent update to the reporting requirements.
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 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 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 3 years previous to the year in which the report is
filed (e.g., the report due by October 25, 2009 will contain the required information for the 2006 calendar year).
* * * * *
3. Appendix A to Part 544 is revised to read as follows:
Appendix AInsurers 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 International Group
Auto Club Enterprise Insurance Group \1\
\1\ Indicates a newly listed company, which must file a report beginning with the report due October 25, 2009.
AutoOwners Insurance Group
Erie Insurance Group
Berkshire Hathaway/GEICO Corporation Group
California State Auto Group
Hartford Insurance Group
Liberty Mutual Insurance Companies
Metropolitan Life Auto & Home Group
Mercury General Group
Nationwide Group
Progressive Group
Safeco Insurance Companies
State Farm Group
Travelers Companies
USAA Group
Farmers Insurance Group
4. Appendix B to Part 544 is revised to read as follows:
Appendix BIssuers of Motor Vehicle Insurance Policies Subject to the Reporting Requirements Only in Designated States
Alfa Insurance Group (Alabama)
Auto Club (Michigan)
Commerce Group, Inc. (Massachusetts)
Kentucky Farm Bureau Group (Kentucky)
New Jersey Manufacturers Group (New Jersey)
Safety Group (Massachusetts)
Southern Farm Bureau Group (Arkansas, Mississippi)
Tennessee Farmers Companies (Tennessee)
5. Appendix C to Part 544 is revised to read as follows:
Appendix CMotor Vehicle Rental and Leasing Companies (Including
Licensees and Franchisees) Subject to the Reporting Requirements of Part 544
Cendant Car Rental
Dollar Thrifty Automotive Group
Enterprise RentACar
Hertz RentACar Division (subsidiary of The Hertz Corporation) UHaul International, Inc. (Subsidiary of AMERCO)
Vanguard Car Rental USA
Issued on: August 11, 2009.
Julie Abraham,
Director, Office of International Policy, Fuel Economy and Consumer Programs.
[FR Doc. E919587 Filed 81409; 8:45 am]
BILLING CODE 491059P
FOR FURTHER INFORMATION CONTACT
Carlita Ballard, Office of International Policy, Fuel Economy and Consumer Programs, NHTSA, 1200 New Jersey Avenue, SE., Washington, DC 20590, by electronic mail to Carlita.Ballard@dot.gov. Ms. Ballard's telephone number is (202) 366 0846. Her fax number is (202) 4932990.