[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1954 Introduced in House (IH)]







106th CONGRESS
  1st Session
                                H. R. 1954

   To regulate motor vehicle insurance activities to protect against 
   retroactive regulatory and legal action and to create fairness in 
        ultimate insurer laws and vicarious liability standards.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 26, 1999

  Mr. Bryant (for himself, Mr. Oxley, Mr. Burr of North Carolina, Mr. 
  Largent, Mr. Shadegg, Mr. Pickering, and Mr. Coburn) introduced the 
    following bill; which was referred to the Committee on Commerce

_______________________________________________________________________

                                 A BILL


 
   To regulate motor vehicle insurance activities to protect against 
   retroactive regulatory and legal action and to create fairness in 
        ultimate insurer laws and vicarious liability standards.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Rental Fairness 
Act of 1999''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. No additional insurance commissioner authority created.
Sec. 3. Definitions.
TITLE I--REGULATION OF MOTOR VEHICLE RENTAL INSURANCE AGENCY ACTIVITIES

Sec. 101. Findings and purposes.
Sec. 102. Standard of regulation for motor vehicle rentals.
Sec. 103. Sunset.
      TITLE II--ULTIMATE INSURER AND VICARIOUS LIABILITY FAIRNESS

Sec. 201. Findings and purposes.
Sec. 202. General fairness and responsibility rule.
Sec. 203. State minimum financial responsibility laws for motor 
                            vehicles.
Sec. 204. Applicability and effective date.

SEC. 2. NO ADDITIONAL INSURANCE COMMISSIONER AUTHORITY CREATED.

    This Act shall not create any new authority for a State insurance 
commissioner or other appropriate insurance regulator of such State to 
issue a regulation, order, or other statutorily authorized 
interpretation or action governing the provisions of this Act except in 
accordance with the relevant State insurance law.

SEC. 3. DEFINITIONS.

    For purposes of this Act:
            (1) Claimant.--The term ``claimant'' means any person who 
        brings a civil action for any theory of harm caused by a motor 
        vehicle or the use of a motor vehicle and any person on whose 
        behalf such an action is brought.
            (2) Harm.--The term ``harm'' means any physical injury, 
        illness, disease, or death or damage to property caused by a 
        motor vehicle.
            (3) Motor vehicle.--The term ``motor vehicle'' shall have 
        the meaning given to this term under section 13102(14) of title 
        49, United States Code.
            (4) Owner.--The term ``owner'' means--
                    (A) a person who is a record or beneficial owner or 
                long-term lessee of a motor vehicle;
                    (B) a person entitled to the use and possession of 
                a motor vehicle subject to a security interest in 
                another person; or
                    (C) a lessee or bailee of a motor vehicle, in the 
                trade or business of renting or leasing motor vehicles, 
                having the use or possession thereof under a lease, 
                bailment, or otherwise.
            (5) Person.--The term ``person'' means any individual, 
        corporation, company, limited liability company, trust, 
        association, firm, partnership, society, joint stock company, 
        or any other entity (including any governmental entity).

TITLE I--REGULATION OF MOTOR VEHICLE RENTAL INSURANCE AGENCY ACTIVITIES

SEC. 101. FINDINGS AND PURPOSES.

    The Congress finds that--
            (1) State regulation of insurance continues to be in the 
        public interest, as affirmed by the McCarran-Ferguson Act;
            (2) where States have laws which regulate the business of 
        insurance, those State laws should not be invalidated, 
        impaired, or superseded by any construction of a Federal Act of 
        Congress unless such Act specifically relates to the business 
        of insurance;
            (3) for those States which have not yet implemented 
        regulations explicitly governing the sale of short term 
        insurance offered with the rental of a motor vehicle, it may be 
        appropriate to prohibit third-parties from enforcing on a 
        retroactive basis general licensure requirements against those 
        who solicit the purchase of or sell such insurance; and
            (4) many States are now considering such legislation and 
        the relief against such actions offered by this title should 
        thus expire once the States have had a reasonable opportunity 
to consider appropriate legislation.

SEC. 102. STANDARD OF REGULATION FOR MOTOR VEHICLE RENTALS.

    (a) Protection Against the Retroactive Application of Regulatory 
and Legal Action.--Except as required by subsection (b), it shall be 
presumed that no State law imposes any licensing, appointment, or 
education requirements on any person who solicits the purchase of or 
sells insurance connected with and incidental to a rental transaction 
of a motor vehicle.
    (b) Preeminence of State Insurance Law.--Nothing in this section 
shall alter the validity, interpretation, construction, or effect of--
            (1) any State statute,
            (2) the prospective application of any court judgment 
        interpreting or apply any State statute, or
            (3) the prospective application of any final State 
        regulation, order, bulletin, or other statutorily authorized 
        interpretation, or action,
which, by its specific terms, expressly regulates or exempts from 
regulation any person or entity which solicits the purchase of or sells 
insurance connected with and incidental to a short term lease or rental 
transaction of a motor vehicle.
    (c) Definition.--For purposes of this section, a person shall be 
considered to be soliciting the purchase of or selling insurance 
connected with and incidental to a rental transaction of a motor 
vehicle if the rental transaction is for a total period of 90 
consecutive days or less, and the insurance is provided for a period of 
consecutive days not exceeding the length of the rental.

SEC. 103. SUNSET.

    This title shall expire 3 years after the date of its enactment.

      TITLE II--ULTIMATE INSURER AND VICARIOUS LIABILITY FAIRNESS

SEC. 201. FINDINGS AND PURPOSES.

    The Congress finds that--
            (1) the vast majority of State statutes and common law 
        follow the generally accepted principle of law that a party 
        should be held liable only for harm that the party could guard 
        against;
            (2) a small number of State common laws and statutes still 
        do not recognize this accepted principle of law, and continue 
        to subject companies that rent or lease motor vehicles to 
        vicarious liability for the negligence of their rental 
        customers in operating the motor vehicle simply because of the 
        company's ownership, even where the rental company has not been 
        negligent in any way and the motor vehicle operated perfectly;
            (3) an even smaller minority of State laws continue to 
        force companies that rent or lease motor vehicles into the role 
        of an ultimate insurer, imposing unlimited potential liability 
        on the companies for the tortious acts of their customers, 
        without regard to fault; and
            (4) these small number of vicarious liability and ultimate 
        insurer laws impose a disproportionate and undue burden on 
        interstate commerce by increasing rental rates for all 
        customers across the Nation, and furthermore, pose a 
        significant competitive barrier to entry for smaller companies 
        attempting to compete in these markets, in contravention of the 
        fundamental legal principle of fairness prohibiting liability 
        without fault.

SEC. 202. GENERAL FAIRNESS AND RESPONSIBILITY RULE.

    No person engaged in the business of renting or leasing a motor 
vehicle shall be placed in the position of an ultimate insurer of its 
rental customers, or the occupants of its rental vehicles, or be liable 
to a claimant for the tortious act of another solely by reason of being 
an owner of such motor vehicle.

SEC. 203. STATE MINIMUM FINANCIAL RESPONSIBILITY LAWS FOR MOTOR 
              VEHICLES.

    Nothing in this title shall relieve any person engaged in the 
business of renting or leasing a motor vehicle from the obligation to 
comply with a State's minimum financial responsibility or insurance 
statute or regulations imposed by that State for the privilege of 
registering and operating a motor vehicle within that State.

SEC. 204. APPLICABILITY AND EFFECTIVE DATE.

    Notwithstanding any other provision of law, this title shall apply 
with respect to any action commenced on or after the date of enactment 
of this title without regard to whether the harm that is the subject of 
the action or the conduct that caused the harm occurred before such 
date of enactment.
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