[Federal Register Volume 59, Number 233 (Tuesday, December 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29958]


[[Page Unknown]]

[Federal Register: December 6, 1994]


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INTERSTATE COMMERCE COMMISSION

49 CFR Parts 1043 and 1084

[Ex Parte No. MC-223]

 

Electronic Filing of Surety Bonds, Trust Fund Agreements, 
Insurance Certificates, and Cancellations

AGENCY: Interstate Commerce Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: We propose to modify our regulations to provide for the 
electronic filing of surety bonds, trust fund agreements, certificates 
of insurance and cancellations. We currently receive approximately 
102,000 such filings each year on prescribed printed forms, most of 
which are filed by a relatively small number of insurers. As compared 
to the printed forms and mailed filings, we believe that electronic 
filing will result in greater time and cost efficiencies for both the 
ICC and insurers.1 Electronic filing will be optional, and 
insurers may continue to file the printed forms.

    \1\In Ex Parte No. 55 (Sub-No. 94), Revision of Application 
Procedures and Corresponding Regulations, (59 FR 51546, October 12, 
1994), we requested comments on our proposal that would permit motor 
carrier applicants to include proof of insurance in their 
applications. Currently the Commission only accepts proof of 
insurance from the insurance company. Electronic filing of the 
initial insurance form will enhance the expedited compliance 
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objectives contemplated in that proceeding.

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DATES: Comments are due January 5, 1995.

ADDRESSES: Send comments (an original and 10 copies) referring to Ex 
Parte No. MC-223 to: Interstate Commerce Commission, Office of the 
Secretary, Case Control Branch, 1201 Constitution Avenue, NW, 
Washington, DC 20423.

FOR FURTHER INFORMATION CONTACT: Patricia A. Burke, (202) 927-5520 or 
James W. Greene, (202) 927-5612. [TDD for the hearing impaired: (202) 
927-5721.]

SUPPLEMENTARY INFORMATION: We automated our receipt of insurance 
certificates and cancellation notices in 1983. Since that time, the 
Commission's computer system has remained unchanged in the face of 
staff cuts and increased insurance filings. The current system is 
maintained on a contracted time-sharing system (Interactive Services, 
Inc.) DEC 20/60 mainframe computer.
    Insurance filings are processed manually, with visual inspection of 
each item and keying in the data. If the insurance filing is not 
complete or the computer rejects the entry, a rejection letter is 
generated and mailed to the insurance company. An insurance master file 
is used to generate monthly billings to insurance companies. Because 
the Commission's current insurance system is labor intensive, and thus 
vulnerable to human error, the potential exists for legal liability due 
to incomplete or inaccurate insurance data on file at the Commission. 
Thus, it is crucial that we develop more efficient ways to handle our 
insurance responsibilities.
    We expect a significant percentage of filings to be made 
electronically. For example, one insurer, which accounts for a large 
number of the agency's monthly insurance filings, already has a 
compatible automated system, and must reduce the filings to printed 
form for filing with the Commission. This proposal eventually will 
improve the accuracy and timeliness of our processing and reduce the 
overall cost to the Commission and the public.
    Accordingly, we propose to modify our regulations to permit the 
electronic filing of all surety bonds, trust fund agreements, insurance 
certificates and cancellations. Electronic filing would be done through 
the transmission of ASCII delimited files (i.e., all records must have 
the same number of fields separated by commas) by way of dial-up access 
to a local telephone number in the Washington, D.C., metropolitan area. 
We welcome comments on whether the ability to file electronically 
should be extended to all of these forms and request comments 
specifically on electronic filing of property broker security 
instruments (BMC 84 surety bond and BMC 85 trust fund agreement). In 
that regard, we note that the BMC 84's and BMC 85's filed are the 
actual security, whereas the other forms certify that the underlying 
policy or bond has been executed.
    We currently maintain a data base of regulated carriers that 
includes insurance information and other data. The electronic filing 
capability we propose will allow us to maintain electronically the 
insurance information on that data base, rather than input it manually 
from the printed forms, without requiring a major rewrite of the entire 
system. While a more sophisticated system could offer additional 
advantages, such as immediate, two-way electronic communication of the 
status of individual insurance transactions, our limited financial 
resources do not permit the development of such a system at this time. 
We believe the basic system we propose here will allow us to achieve 
the more important advantages, while staying within our resource 
limitations. However, we invite public comment on how this limitation 
might be overcome, perhaps by industry initiative, and invite comment 
on other alternative approaches. Commenters should discuss whether such 
industry involvement would be ethical.
    As noted, we believe electronic filing will promote efficiencies 
for both the Commission and insurers, resulting in benefits to the 
public. To help gauge the full effect of our proposal, we seek comments 
on the number of insurers that envision filing electronically and the 
extent to which they will avail themselves of the opportunity to file 
their forms electronically. Given the potential for significant public 
benefits from electronic filing of insurance and substantial voluntary 
use of such a system by insurers, we also seek comments on the 
alternative of making electronic filing mandatory, either initially or 
at some point in the future. Such comments should include a discussion 
of the impact of such a mandatory system on insurers and an assessment 
of the type of system that would be necessary to handle the resulting 
volume of use.
    After receiving comments on the proposal, our Systems Services 
Branch will build and test the electronic filing system, as well as 
prepare and maintain systems documentation and a User Manual. Each 
participating insurer will receive a unique account and password for 
login purposes on the timesharing system. We also envision that the 
insurer could register branch offices or other authorized filers under 
its account and password. We contemplate access being available 24 
hours a day, 7 days a week (except scheduled maintenance) by way of 
dial-up at either 1200 or 2400 baud to a local telephone number in the 
Washington, D.C., metropolitan area (although we recognize that 9600 
baud may be more desirable). Any long distance telephone charges 
required to reach such number will be the responsibility of the filer, 
and even at 1200 baud should be minimal. Once connected, the insurance 
company will be presented with a variety of menu options.
    After an authorized insurer logs in on the system and selects the 
menu option to upload insurance filings, the ICC computer will initiate 
the communications protocol, KERMIT, to receive filings. Upon 
completion of the transmission of the insurance filings, the ICC 
computer system will append the filings to a transaction file for 
subsequent batch processing. The insurance company will be returned to 
the main menu. One of the menu options contemplated is the insurer's 
ability to generate a report showing the number and type of 
transactions transmitted and received by the ICC. This transaction 
report will not be available to the home office of the insurance 
company at the time the transactions are filed. The home office will 
receive a comprehensive list of filings accepted at the time it 
receives its monthly billing statement.
    However, mere transmission of the filings does not guarantee 
acceptance by the Commission. Any record not containing a valid field 
or containing fields with incomplete or invalid data will be flagged 
with an error code. Each of these records will generate a rejection 
notice to be sent back to the insurance company. Records passing the 
initial validity checks will then be edited field by field against the 
ICC carrier and insurance data base. When all transmitted fields have 
been edited and verified, the filing will be applied against the 
insurance master file, either adding a new filing or applying a 
cancellation against an existing filing. All records that do not pass 
the automated edits will be flagged for manual processing. After manual 
review, those records accepted will be applied against the insurance 
master file, and those rejected will generate a rejection letter. A 
follow-up ``hard copy'' of an accepted filing will not be required. 
However, we do propose that insurers agree to furnish the Commission a 
duplicate original of any policy (or policies) and all endorsements, 
surety bond, trust fund agreement, or other filing.
    We will accept or reject individual filings, and assess filing 
fees, as we do for printed filings, except that, in lieu of returning a 
copy of the printed form to the filer, we will provide a listing 
identifying each electronic filing with the monthly billing statement.
    In connection with the assessment and billing of fees for 
electronic filings, we are considering the option of allowing insurers 
to establish large prepaid accounts from which the filing fees would 
automatically be deducted. This enhancement would reduce costs to both 
insurers and the Commission. Once this system has been in place for a 
sufficient amount of time, we will review the fees charged and the 
appropriateness of changing them to reflect the costs associated with 
the new system.
    To obtain a copy of this notice, write to, call, or pick up in 
person from: Office of the Secretary, Room 2215, Interstate Commerce 
Commission, Washington, DC 20423. Telephone: (202) 927-7428. 
[Assistance for the hearing impaired is available through TDD service 
(202) 927-5721.]

Regulatory Flexibility

    The rules proposed herein will not impose additional burdens on 
insurers; rather, they will offer insurers a new option of complying 
with existing requirements. While we expect the impact of the proposed 
rules to be beneficial, we do not anticipate it to be significant on 
insurers.

Environmental and Energy Considerations

    We preliminarily conclude that the proposed action will not 
significantly affect either the quality of the human environment or the 
conservation of energy resources.

List of Subjects

49 CFR Part 1043

    Insurance, Motor carriers, Surety bonds.

49 CFR Part 1084

    Freight forwarders, Insurance, Surety bonds.

    Decided: November 21, 1994.

    By the Commission, Chairman McDonald, Vice Chairman Phillips, 
Commissioners Simmons, Morgan, and Owen.
Vernon A. Williams,
Secretary.
    For the reasons set forth in the preamble, the Commission proposes 
to amend chapter X of title 49 of the Code of Federal Regulations, 
parts 1043 and 1084 as follows:

PART 1043--SURETY BONDS AND POLICIES OF INSURANCE

    1. The authority citation for part 1043 continues to read as 
follows:

    Authority: 49 U.S.C. 10101, 10321, 11701, 10927; 5 U.S.C. 553.

    2. A new Sec. 1043.12 is proposed to be added to read as follows:


Sec. 1043.12  Electronic filing of surety bonds, trust fund agreements, 
certificates of insurance and cancellations.

    (a) Insurers may, at their option and in accordance with the 
requirements and procedures set forth in paragraphs (a) through (d) of 
this section, file forms BMC 34, BMC 35, BMC 36, BMC 82, BMC 83, BMC 
84, BMC 85, BMC 91, and BMC 91X electronically, in lieu of using the 
prescribed printed forms.
    (b) Each insurer must obtain authorization to file electronically 
by registering with the Commission. An individual account number and 
password for computer access will be issued to each registered insurer.
    (c) All files to be transmitted must be in an ASCII delimited 
format, i.e., all records must have the same number of fields separated 
by commas. Any field that contains commas must also be enclosed in 
double quotation marks (``). Numeric fields must be presented without 
internal commas and without leading zeros or blanks. The record layouts 
for electronic filing transactions are as described in the following 
table:

                                    Electronic Insurance Filing Transactions                                    
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                                                                                                      Required  
                                     No. of                                                           F=filing  
           Field name              positions                        Description                       C=cancel  
                                                                                                       B=both   
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Record Type....................  1 Numeric      1 Filing..........................................  B           
                                                2 Cancellation....................................              
Insurer Number.................  8 Numeric      ICC Assigned Insurer Number (Home Office) With      B           
                                                 Suffix (Issuing Office), If Different, e.g. 12345-             
                                                 01.                                                            
Filing Type....................  1 Numeric      1 = BI&PD.........................................  B           
                                                2 = Cargo.........................................              
                                                3 = Bond..........................................              
                                                4 = Trust Fund....................................              
ICC Docket Number..............  8 Text         ICC Assigned MC or FF Number e.g., MC000045.......  B           
Insured d/b/a Name.............  60 Text        Doing Business As Name If Different From Legal      B           
                                                 Name.                                                          
Insured Legal Name.............  120 Text       Legal Name........................................  B           
Insured P.O. Box/Route.........  30 Text        If applicable.....................................  B           
Insured Building, Suite, etc...  30 Text        If applicable.....................................  B           
Insured Street Address.........  30 Text        If applicable.....................................  B           
Insured City...................  45 Text        If Mexican carrier include state with city........  B           
Insured State..................  2 Text         If Mexican carrier enter MX for state.............  B           
Insured Zip Code...............  10 Text        ..................................................  B           
Form Code......................  10 Text        BMC-91, BMC-91X, BMC-34, BMC-35, etc..............  B           
Primary or Excess Coverage.....  1 Text         P or E--If BMC-91X indicator of primary or excess   F           
                                                 policy.                                                        
Limit of Liability.............  5 Numeric      $ in Thousands....................................  F           
Underlying Limit of Liability..  5 Numeric      $ in Thousands (will default to $000 if Primary)..  F           
Effective Date.................  8 Text         MM/DD/YY Format for both Filing or Cancellation...  B           
Policy Number..................  25 Text        ..................................................  B           
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    (d) All registered insurers agree to furnish upon request to the 
Commission a duplicate original of any policy (or policies) and all 
endorsements, surety bond, trust fund agreement, or other filing.

PART 1084--SURETY BONDS AND POLICIES OF INSURANCE

    3. The authority citation for part 1084 continues to read as 
follows:

    Authority: 49 U.S.C. 10102, 10321 and 10927; 5 U.S.C. 553.

    4. A new Sec. 1084.10 is proposed to be added to read as follows:


Sec. 1084.10  Electronic filing of surety bonds, certificates of 
insurance and cancellations.

    Insurers may, at their option and in accordance with the 
requirements and procedures set forth at 49 CFR 1043.12, file 
certificates of insurance, surety bonds, and other securities and 
agreements electronically.

[FR Doc. 94-29958 Filed 12-5-94; 8:45 am]
BILLING CODE 7035-01-P