[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