[Federal Register Volume 63, Number 243 (Friday, December 18, 1998)]
[Rules and Regulations]
[Pages 70051-70053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33545]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 544

[Docket No.: 98-001; Notice 02]
RIN 2127-AH05


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: This final rule updates the list in 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. 33112. Under 49 CFR Part 544, each insurer listed would be 
required to file a report for the 1995 calendar year not later than 
October 25, 1998. In this final rule, the agency extends the time for 
filing to a date not later than 30 days from the publication of this 
notice in the Federal Register. Further, as long as it remains listed, 
each company must submit reports by each subsequent October 25.

DATES: The final rule on this subject is effective December 18, 1998.
    Reporting Date: Insurers listed in this final rule must submit 
their CY 1995 reports not later than 30 days from the publication of 
this notice in the Federal Register. Previously listed insurers whose 
names are removed by this notice need not submit reports for CY 1995.

FOR FURTHER INFORMATION CONTACT: Ms. Rosalind Proctor, Office of 
Planning and Consumer Programs, NHTSA, 400 Seventh Street, SW, 
Washington, DC 20590. Ms. Proctor's telephone number is (202) 366-0846. 
Her fax number is (202) 493-2739.

SUPPLEMENTARY INFORMATION:

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 
implementing regulation, 49 CFR 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 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 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 agency may not, however, exempt an insurer under this 
section if it is considered an insurer only because of Section 
33112(b)(1); that is, if it is a self-insurer. 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 provided in 49 CFR Part 544, NHTSA exercises its exemption 
authority by listing in Appendix A each insurer which 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 that are required to report for particular States 
because each insurer had a 10 percent or a greater market share of 
motor vehicle premiums in those States. In establishing Part 544 (52 FR 
59, January 2, 1987), 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 for the agency each spring. The agency uses the data 
to determine the insurers' market shares 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, defined in 49 U.S.C. 
33112(b)(1) as any person who has a fleet of 20 or more motor 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. Under 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 furnishing such reports is excessive 
in relation to the size of the business of the insurer; and

[[Page 70052]]

    (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 reports from only the 
largest companies would sufficiently represent the theft experience of 
rental and leasing companies. NHTSA concluded those 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 that 
are subject to reporting instead of the relatively numerous self-
insurers that are exempted. NHTSA updated Appendix C based primarily on 
information from the publications Automotive Fleet Magazine and 
Business Travel News.

Notice of Proposed Rulemaking

1. Insurers of Passenger Motor Vehicles
    On May 4, 1998, NHTSA published a notice of proposed rulemaking 
(NPRM) to update the list of insurers in Appendices A, B, and C 
required to file reports (63 FR 24519). Based on the 1995 calendar year 
A.M. Best data for market shares, NHTSA proposed to amend the list in 
Appendix A of insurers which must report because each had at least 1 
percent of the motor vehicle insurance premiums on a national basis. 
The list was last amended in a notice published on June 23, 1997 (See 
62 FR 33754). One company, Metropolitan Group, included in the June 
1997 listing, was proposed to be removed from Appendix A. Three 
companies, American Financial Group, Erie Insurance Company, and Zurich 
Insurance Group-U.S., were proposed to be added.
    Under Part 544, each of the 20 insurers listed in Appendix A of the 
NPRM would have been required to file a report not later than October 
25, 1998, setting forth the information required by Part 544 for each 
State in which it did business in the 1995 calendar year. As long as 
those 20 insurers remain listed, they would be required to submit 
reports by each subsequent October 25 for the calendar year ending 
slightly less than 3 years before.
    Appendix B of the NPRM listed those insurers that would be required 
to report for particular States for calendar year 1995, because each 
insurer had a 10 percent or a greater market share of motor vehicle 
premiums in those States. Based on the 1995 calendar year A.M. Best 
data for market shares, it was proposed that Integon Corporate Group, 
reporting on its activities in the State of North Carolina be removed 
from Appendix B. Two companies, Allmerica P & C Companies (Michigan) 
and Island Insurance (Hawaii), that were not listed in Appendix B, were 
proposed to be added.
    Under Part 544, each of the 12 insurers listed in Appendix B of the 
NPRM would have been required to report no later than October 25, 1998, 
on their calendar year 1995 activities in every State in which they had 
a 10 percent or a greater market share, 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 or before each subsequent 
October 25 for the calendar year ending slightly less than 3 years 
before.
2. Rental and Leasing Companies
    Based on information in Automotive Fleet Magazine and Business 
Travel News for 1995, the most recent year for which data are 
available, NHTSA proposed several changes in Appendix C. As indicated 
above, that appendix lists rental and leasing companies required to 
file reports. Based on the data reported in the above mentioned 
publications, it proposed that five rental and leasing companies, 
Associates Leasing Inc., Enterprise-Rent-A-Car, GE Capital Fleet 
Services, PHH Vehicle Management Services, and Wheels, Inc., be added 
to Appendix C.
    Under Part 544, each of the 20 companies (including franchisees and 
licensees) listed in Appendix C in the NPRM would have been required to 
file reports for calendar year 1995 no later than October 25, 1998, and 
set forth the information required by Part 544. As long as those 20 
companies 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.

Public Comments on Final Determination

    In response to the NPRM, the agency received no comments. 
Accordingly, this final rule adopts the proposed changes to Appendices 
A, B, and C. Because this final rule listing the insurance companies 
that must file reports is being published too late to allow the 
companies to file their reports by October 25, 1998, the agency has 
decided to extend the filing deadline on a one-time basis. Accordingly, 
the companies listed in those appendices are required to file the 
reports required by 49 U.S.C. 33112 and 49 CFR Part 544 no later than 
thirty days from the date this notice is published in the Federal 
Register.

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 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 would add three insurers and remove one 
insurer; for Appendix B, the agency would remove one insurer and add 
two insurers; and for appendix C, the agency would add five additional 
companies. The agency therefore estimates that the net effect of this 
final rule will be a cost increase to insurers, as a group, of 
approximately $148,850.
    Interested persons may wish to examine the 1987 final regulatory 
evaluation. Copies of that evaluation have been placed in NHTSA Docket 
No. T86-01; Notice 2. Any interested person may obtain a copy of this 
evaluation by writing to NHTSA, Docket Section, Room 5109, 400 Seventh 
Street, SW, Washington, DC 20590, or by calling (202) 366-4949.

[[Page 70053]]

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. 3501 et seq.). This collection of information was assigned OMB 
Control Number 2127-0547 (``Insurer Reporting Requirements'') and was 
approved for use through July 31, 2000.
3. Regulatory Flexibility Act
    The agency has also considered the effects of this rulemaking under 
the Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). I certify 
that this final rule would 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 to be 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 all forms of 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 proposes to exempt all ``self 
insured 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 in accordance with 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. 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, Insurance, 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 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 not later than 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 three years previous to the year in which 
the report is filed.
    3. Appendix A to Part 544 is revised to read as follows:

Appendix A--Insurers of Motor 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 Financial Group \1\
American International Group
California State Auto Association
CNA Insurance Group
Erie Insurance Group \1\
Farmers Insurance Group
GEICO Corporation Group
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
Zurich Insurance Group-U.S.\1\

    \1\ Indicates a newly listed company which must file a report no 
later than 30 days from the publication of this notice in the 
Federal Register.
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    4. 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)
Allmerica P & C Companies (Michigan) \1\
Arbella Mutual Insurance (Massachusetts)
Auto Club of Michigan Group (Michigan)
Commerce Group, Inc. (Massachusetts)
Commercial Union Insurance Companies (Maine)
Concord Group Insurance Companies (Vermont)
Island Insurance Group (Hawaii) \1\
Kentucky Farm Bureau Group (Kentucky)
Nodak Mutual Insurance Company (North Dakota)
Southern Farm Bureau Group (Arkansas, Mississippi)
Tennessee Farmers Companies (Tennessee)

    5. Appendix C to Part 544 is revised 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.
ARI (Automotive Rentals, Inc.)
Associates Leasing Inc.\1\
A T & T Automotive Services, Inc.
Avis, Inc.
Budget Rent-A-Car Corporation
Citicorp Bankers Leasing Corporation
Dollar Rent-A-Car Systems, Inc.
Donlen Corporation
Enterprise Rent-A-Car \1\
GE Capital Fleet Services \1\
Hertz Rent-A-Car Division (subsidiary of Hertz Corporation)
Lease Plan USA, Inc.
National Car Rental System, Inc.
Penske Truck Leasing Company
PHH Vehicle Management Services \1\
Ryder System, Inc. (Both rental and leasing operations)
U-Haul International, Inc. (Subsidiary of AMERCO)
USL Capital Fleet Services
Wheels Inc.\1\

    Issued on: December 7, 1998.
L. Robert Shelton,
Associate Administrator for Safety Performance Standards.
[FR Doc. 98-33545 Filed 12-17-98; 8:45 am]
BILLING CODE 4910-59-P