[Federal Register Volume 60, Number 123 (Tuesday, June 27, 1995)]
[Rules and Regulations]
[Pages 33145-33149]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15524]



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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 544

[Docket No. 95-004; Notice 3]
RIN 2127-AE94


Insurer Reporting Requirements; List of Insurers Required to File 
Reports

AGENCY: National Highway Traffic Safety Administration (NHTSA), 
Department of Transportation (DOT).

ACTION: Final rule.

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SUMMARY: In this final rule, NHTSA publishes an update to its list in 
[[Page 33146]] 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. section 33112. 
Each insurer listed in these appendices must file a report for the 1992 
calendar year not later than October 25, 1995. Further, as long as they 
remain listed, they must submit reports on each subsequent October 25.

DATES: The final rule on this subject is effective July 27, 1995.
    Reporting Date: Insurers listed in the appendices are required to 
submit reports on their calendar year 1992 experience, which is due 
October 25, 1995. Previously listed insurers whose names are removed by 
this notice need not submit reports for that year. Insurers newly 
listed in this final rule must submit their reports for calendar year 
1992 on or before October 25, 1995. 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. Barbara A. Gray, Office of Market 
Incentives, NHTSA, 400 Seventh St., SW., Washington, DC 20590. Ms. 
Gray's telephone number is (202) 366-1740. Her fax number is (202) 366-
4329.

SUPPLEMENTARY INFORMATION:

Background

    Pursuant to 49 U.S.C. section 33112, Insurer reports and 
information, NHTSA requires certain passenger motor vehicle insurers to 
file an annual report with NHTSA unless the agency exempts the insurer 
from filing such reports. Each insurers' 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 action 
taken by the insurer to reduce or deter theft. Under the agency's 
implementing regulation, 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 or 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.

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 State-by-
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.
    As described in the final rule establishing the requirement for 
insurer reports (52 FR 59, January 2, 1987), in 49 CFR part 544, NHTSA 
exercises its exemption authority by listing in Appendix A each insurer 
which must report because it had written 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 greater market share of motor vehicle premiums in those States. In 
the January 1987 final rule, 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 to the agency each spring. The agency 
uses the data to determine the insurers' market share nationally and in 
each State.

B. Self-Insured Rental and Leasing Companies

    In addition, upon making certain determinations, NHTSA is 
authorized to grant exemptions to self insurers, i.e., any person who 
has a fleet of 20 or more 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, 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 providing the information is 
excessive in relation to the size of the insurer's business; and
    (2) the information from that insurer will not contribute 
significantly to carrying out chapter 331.
    Conversely, NHTSA may not exempt a self insurer solely based on 
meeting the definition of insurer as defined in section 33112(b)(1).
    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 experiences of 
rental and leasing companies. NHTSA concluded that 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, which 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 which 
are subject to reporting instead of listing relatively numerous self 
insurers that are exempted. NHTSA updates Appendix C based on 
information from the publications Automotive Fleet Magazine and Travel 
Business Travel News. 

Notice of Proposed Rulemaking

(1) Insurers of Passenger Motor Vehicles

    On January 19, 1995, NHTSA published a notice of proposed 
rulemaking (NPRM) to update the list of insurers in Appendices A, B, 
and C required to file reports (See 60 FR 3830). Based on the 1992 
calendar year market share data provided by A.M. Best, NHTSA proposes 
to amend the listing in [[Page 33147]] Appendix A of insurers which 
must report because each had written at least one percent of the motor 
vehicle insurance premiums on a national basis. The list was last 
amended in a notice published on December 1, 1993 (See 58 FR 63299). 
One company, United States F & G Group, included in the December 1993 
listing, was proposed to be removed from Appendix A. Three companies, 
General ACC Group, Hanover Insurance Companies, and Safeco Insurance 
Companies, that were not listed in Appendix A, were proposed to be 
added.
    Each of the 19 insurers listed in Appendix A in this notice would 
be required to file a report not later than October 25, 1995, setting 
forth the information required by part 544 for each State in which it 
did business in the 1992 calendar year. As long as those 19 insurers 
remain listed, they would be required to submit reports on each 
subsequent October 25 for the calendar year ending slightly less than 3 
years before.
    Appendix B lists those insurers that would be required to report 
for particular States for the calendar year 1992, because each insurer 
had a 10 percent or greater market share of motor vehicle premiums in 
those States. Based on the 1992 calendar year A.M. Best data for market 
shares, it was proposed that one company, Farm Bureau Mutual Insurance 
Company, Inc., (Kansas Farm Bureau Group (Farm Bureau)), reporting on 
its activities in the State of Kansas be added to Appendix B.
    The 12 insurers listed in Appendix B of this notice would be 
required to report on their calendar year 1992 activities in every 
State in which they had a 10 percent or greater market share. These 
reports must be filed no later than October 25, 1995, and set forth the 
information required by part 544. As long as those 12 insurers remain 
listed, they would be required to submit reports on each subsequent 
October 25 for the calendar year ending slightly 3 years before.

(2) Rental and Leasing Companies

    Based on information in Automotive Fleet Magazine and Travel Trade 
Business Travel News for 1992, the most recent year that data are 
available, NHTSA proposes no changes be made in Appendix C. 
Accordingly, each of the 10 companies (including franchisees and 
licensees) listed in this notice in Appendix C would be required to 
file reports for the calendar year 1992 no later than October 25, 1995, 
and set forth the information required by part 544. As long as those 10 
companies remain listed, they would be required to submit reports on 
each subsequent October 25 for the calendar year ending slightly less 
than 3 years before.
    NHTSA notes that on July 5, 1994, the Cost Savings Act, (including 
Title VI-Theft Prevention) was revised and codified ``without 
substantive change.'' The passenger motor vehicle theft insurers' 
reporting provisions, formerly at 15 U.S.C. 2032 are now at 49 U.S.C. 
33112. This final rule amends part 544 to reflect the changed statutory 
authority.

Public Comments and Final Determination

1. Insurers of Passenger Motor Vehicles

    In response to the NPRM, the agency received responses from two 
commentors. Both commentors were companies listed in the January 1995 
NPRM. Each commentor questioned the appropriateness of its inclusion in 
one of the appendices.
    No comments were received objecting to the deletion of United 
States F & G Groups from Appendix A. Accordingly, it has been deleted.
    Hanover Insurance Companies (Hanover) wrote to request that it not 
be included in Appendix A. As stated, NHTSA's proposal to include 
Hanover was based on market share data provided by A. M. Best. Hanover 
wrote that for 1992 the total premiums for all forms of motor vehicle 
insurance issued by Hanover and its affiliates were 1,031,862,294 or 
.97 percent of the entire market. Hanover believes that because the 
company and its affiliates wrote less than one percent of the total 
motor vehicle insurance premiums written by all insurers in 1992 that 
granting an exemption would not significantly affect the validity or 
usefulness of the information of the reports.
    The agency notes that Hanover's total written premiums are less 
than 1 percent of the total premiums for all forms of motor vehicle 
insurance issued by insurers within the United States in 1992. Since 
Hanover does not meet the criteria for inclusion, NHTSA determines that 
Hanover should not be added to Appendix A.
    Farm Bureau Mutual Insurance Company, Inc., (Kansas Farm Bureau 
Group (Farm Bureau)) wrote that it not be included in Appendix B. As a 
rationale, Farm Bureau stated that its market share for 1992 was 10.3 
percent, however for 1993 the market share was 9.8 percent.
    Farm Bureau stated that because a moratorium was placed on its new 
auto business in 1993, it believes its market share will decrease for 
1994. Thus, Farm Bureau stated it met the 10 percent requirement for 
only one year. Farm Bureau believes because it has ``very few'' auto 
theft claims, and since it will be reporting for only one year, it 
questions the relevance of providing its statistical data for the 
purposes of the law. Additionally, Farm Bureau stated that major 
catastrophes struck the property casualty industry. In 1992, storm 
claims (tornados) were paid in Kansas totalling in excess of one 
billion dollars. Farm Bureau has been faced with major financial 
responsibilities to its policyholders. Therefore, it believes the cost 
of preparing and furnishing this report (for only one year) is 
excessive in relation to the size of its business.
    As required 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 insurers in any State. Additionally, 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. Therefore, Farm 
Bureau does not qualify as a ``small insurer'' because its total 
premiums written exceeds 10 percent of the total written in Kansas. 
Since Farm Bureau does not meet the exemption criterion of less than 10 
percent of the total premiums written within the State, Farm Bureau 
should remain listed on Appendix B. However, section 33112(f)(2) states 
that the Secretary (NHTSA) ``* * * shall exempt by regulation a small 
insurer from this section if the Secretary finds that the exemption 
will not significantly affect the validity or usefulness of the 
information collected and compiled under this section, nationally or 
State-by-State.''
    Based on Farm Bureau's petition that auto theft claims are 1.3 
percent and less than .75 of the 1 percent of its total claims paid, 
coupled with the financial burdens inflicted on the industry (in 
Kansas), the agency has determined the exemption authority provided in 
section 33112(e)(1) and (2) can be applied. Therefore, the agency 
believes that the cost of preparing and furnishing this report would be 
excessive in relation to the size of the insurer's business, and the 
information would not contribute significantly to carrying out NHTS's 
statutory obligations. Further, by exempting Farm Bureau, it will be 
relieved of an unnecessary burden. [[Page 33148]] Given that Farm 
Bureau Mutual Insurance Co., is removed from Appendix B.

2. Rental and Leasing Companies

    Based on information in Automotive Fleet Magazine and Travel Trade 
Business Travel News for 1992, the most recent year for which data are 
available, NHTSA proposes no changes in Appendix C. Accordingly, each 
of the 10 companies (including franchisees and licensees) listed in the 
final rule in Appendix C are required to file reports for calendar year 
1992 no later than October 25, 1995, and set forth in the information 
required by part 544. As long as those 10 companies remain listed, they 
are required to submit reports on or before each subsequent October 25 
for the calendar year ending slightly less than 3 years before.
    After reviewing the public comments and, as discussed above, making 
the appropriate adjustments to Appendices A and B, NHTSA has determined 
that each of the 18 insurers listed in Appendix A, each of the 11 
insurers listed in Appendix B, and each of the 10 insurers listed in 
Appendix C, are required to submit an insurers report under part 544. 
Each listed insurer must report on its experience for calendar year 
1992, and set forth the information required by 49 CFR part 544.

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 expressly 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 cost estimates in the 
1987 final regulatory evaluation, the agency estimates that the cost of 
compliance will be about $50,000 for any insurer that is 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 removed one insurer and added two insurers; 
for Appendix B, the agency made no changes; and for Appendix C, the 
agency made no changes. The agency therefore estimates that the net 
effect of this final rule will be a cost increase to insurers, as a 
group, of less than $100,000.
    Interested persons may wish to examine the 1987 final regulatory 
evaluation. Copies of that evaluation have been placed in Docket No. 
T86-01; Notice 2. Any interested person may obtain a copy of this 
evaluation by writing NHTSA, Docket Section, Room 5109, 400 Seventh 
Street S.W., Washington D.C. 20590, or by calling (202) 366-4949.

(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. 3501et seq.) This collection of information has been assigned 
OMB Control Number 2127-0547 (``Insurer Reporting Requirements'') and 
has been approved for use through October 31, 1996.

(3) Regulatory Flexibility Act

    The agency has also considered the effect of this rulemaking under 
the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.) I certify 
that this final rule will not have a significant economic impact on a 
substantial number of small entities. The rationale of this 
certification is that none of the companies included on 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 motor vehicle insurance account for 
less than one 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 has exempted, by rule, all ``self insured rental 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 in accordance with the principle and 
criteria contained in Executive Order 12612, and it has been determined 
that this 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 will 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 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 is revised to read as 
follows:

    Authority: 49 U.S.C. 33112; delegation of authority at 49 CFR 
1.50.
    2. Section 544.2 Purpose. is revised to read as follows:


Sec. 544.2  Purpose.

    The purpose of these reporting requirement is to aid in 
implementing and evaluating the provisions of 49 U.S.C. chapter 331 
Theft Prevention to prevent or discourage the theft of motor vehicles, 
to prevent or discourage the sale or distribution in interstate 
commerce of used parts removed from stolen motor vehicles, and to help 
reduce the cost to consumers of comprehensive insurance coverage for 
motor vehicles.
    3. Paragraph (a) of Sec. 544.4 Definitions is revised to read as 
follows:


Sec. 544.4  Definitions.

    (a) Statutory terms. All terms defined in 49 U.S.C. 33101 and 33112 
are used in accordance with their statutory [[Page 33149]] meanings 
unless otherwise defined in paragraph (b) of this section.
* * * * *
    4. 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, 1986. The 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 October 25, 1995 shall contain the required information 
for the 1992 calendar year).
* * * * *
    5. Appendix A to part 544 is revised to read as follows:

Appendix A--Insurers of Motors Vehicle Insurance Policies Subject 
to the Reporting Requirements in Each State in Which They Do 
Business

Aetna Life & Casualty Group
Allstate Insurance Group
American Family Group
American International Group
California State Auto Association
CNA Insurance Companies
Farmers Insurance Group
Geico Corporation Group
General ACC Group*

    * Indicates a newly listed insurer which must file a report 
beginning with the report due October 25, 1995.
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ITT Hartford Insurance Group
Liberty Mutual Group
Nationwide Group
Progressive Group
Prudential of America Group
Safeco Insurance Companies*
State Farm Group
Travelers Insurance Group
USAA Group
    6. 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)
Amica Mutual Insurance Company (Rhode Island)
Arbella Mutual Insurance (Massachusetts)
Auto Club of Michigan Group (Michigan)
Commerce Group, Inc. (Massachusetts)
Commercial Union Insurance Companies (Maine)
Concord Group Insurance Companies (Vermont)
Erie Insurance Companies (Pennsylvania)
Kentucky Farm Bureau Group (Kentucky)
Southern Farm Bureau Casualty Group (Arkansas, Mississippi)
Tennessee Farmers Companies (Tennessee)
    7. Appendix C to part 544 is republished 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.
American International Rent-A-Car Corp./ANSA
Avis, Inc.
Budget Rent-A-Car Corporation
Dollar Rent-A-Car Systems, Inc.
Hertz Rent-A-Car Division (subsidiary of Hertz Corporation)
National Car Rental System, Inc.
Penske Truck Leasing Company
Ryder System, Inc. (both rental and leasing operations)
U-Haul International, Inc. (subsidiary of AMERCO)
    Issued on: June 16, 1995.
Barry Felrice,
Associate Administrator for Safety Performance Standards.
[FR Doc. 95-15524 Filed 6-26-95; 8:45 am]
BILLING CODE 4910-59-P