[Federal Register Volume 64, Number 86 (Wednesday, May 5, 1999)]
[Proposed Rules]
[Pages 24123-24128]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-11212]


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DEPARTMENT OF TRANSPORTATION

Federal Highway Administration

49 CFR Parts 360 and 387

[FHWA Docket No. FHWA-97-2923; MC-97-11]
RIN 2125-AE06


Qualifications of Motor Carriers to Self-Insure Their Operations 
and Fees to Support the Approval and Compliance Process

AGENCY: Federal Highway Administration (FHWA), DOT.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: This document proposes to identify circumstances in which the 
public is subjected to an unacceptable level of risk of uncompensated 
losses generated from bodily injury and property damage (BI&PD) claims 
arising from the actions of for-hire motor carriers conducting self-
insured operations in interstate or foreign commerce. More 
specifically, the FHWA seeks public comment on a proposal to reevaluate 
the security and collateral requirements of any self-insured carrier 
that fails to generate from operations, after payment of all expenses 
except annual self-insurance claims expenses, twice the level of cash 
needed to pay the self-insurance claims. The FHWA also proposes to 
assess an additional application fee to cover carrier requests for 
modifications and alterations to self-insurance authorizations which 
require a reevaluation of the carrier's financial condition. The FHWA 
can now do the basic first-time self-insurance application for $3,000. 
This amount is $1,200 less than the $4,200 fee the FHWA currently 
charges. Thus, the agency is also proposing to reduce the fee for 
processing the initial application to $3,000 for an economic cost 
savings. The proposed actions will not apply to carriers authorized to 
self-insure cargo-only claims. The requirements for cargo-only self-
insurance are not substantial because the required cargo coverage is 
relatively small. Consequently, the expenses for reviewing cargo-only 
applications are not significant. Further, the risk of an unacceptable 
level of uncompensated self-insurance cargo claims is low.
    Finally, this NPRM would also propose implementing additional 
procedures necessary for motor carriers to establish billing accounts 
to pay all insurance-related fees required by the Federal Highway 
Administration. A schedule of filing fees and general instructions 
regarding payment are provided.

DATES: Comments must be received on or before July 6, 1999.

ADDRESSES: Your signed, written comments must refer to the docket 
number appearing at the top of this document and you must submit the 
comments to the Docket Clerk, U.S. DOT Dockets, Room PL-401, 400 
Seventh Street, SW., Washington, DC 20590-0001. All comments received 
will be available for examination at the above address between 9 a.m. 
and 5 p.m., e.t., Monday through Friday, except Federal holidays. Those 
desiring notification of receipt of comments must include a self-
addressed, stamped envelope or postcard.

FOR FURTHER INFORMATION CONTACT: Mr. John F. Grimm, (202) 366-4039, or 
Mr. Stanley M. Braverman, (202) 358-7035, Office of Motor Carriers, 
FHWA, 400 Virginia Avenue, SW., Suite 600, Washington, DC 20024; or Mr. 
Michael J. Falk, Office of the Chief Counsel, HCC-20, (202) 366-1384, 
FHWA, 400 Seventh Street, SW., Washington, DC 20590. Office hours are 
from 7:45 a.m. to 4:15 p.m., e.t., Monday through Friday, except 
Federal holidays.

SUPPLEMENTARY INFORMATION:

Electronic Access

    Internet users can access all comments received by the U.S. DOT 
Dockets, Room PL-401, by using the universal resource locator (URL): 
http://dms.dot.gov. It is available 24 hours each day, 365 days each 
year. Please follow the instructions online for more information and 
help.
    An electronic copy of this document may be downloaded using a modem 
and suitable communications software from the Government Printing 
Office's Electronic Bulletin Board Service at (202) 512-1661. Internet 
users may reach the Federal Register's home page at: http://
www.nara.gov/fedreg and the Government Printing Office's database at: 
http://www.access.gpo.gov/nara.

I. Background

    On September 23, 1997, the FHWA published an advance notice of 
proposed rulemaking (ANPRM) to examine the sufficiency of existing 
self-insurance requirements, the need for assessing additional fees for 
processing and monitoring functions, and the propriety of seeking 
congressional authorization to terminate the self-insurance program 
altogether (62 FR 49654, FHWA Docket No. MC-97-11). On September 29, 
1997, the FHWA corrected the assigned FHWA docket number and address 
for submission of comments (62 FR 50892, FHWA Docket No. FHWA-97-2923; 
MC-97-11).
    The ANPRM was published primarily to obtain comments from motor 
carriers, insurance companies, and other interested parties to 
determine whether the existing self-insurance requirements and 
conditions were sufficiently stringent to ensure that the public is 
protected against uncompensated losses. The FHWA requested public 
comment on the sufficiency of the back-up collateral required for the 
authorizations both in form and amount, the reporting requirements, and 
on proposed fees to cover application modification and monitoring 
functions. The former

[[Page 24124]]

Interstate Commerce Commission (ICC) always charged application fees; 
however, charges for monitoring carrier compliance with agency 
requirements were not assessed. A series of questions raising issues 
concerning the merits of retaining the self-insurance program were also 
proposed.
    The Transportation Equity Act for the 21st Century (Pub. Law 105-
178, 112 Stat. 107) (June 9, 1998) makes no changes in the 
authorization to provide a self-insurance program and does not impact 
on the recommendations contained herein.

II. Responses to Public Comments

    Twenty-seven (27) comments were received from motor carriers and 
their associations, insurance associations, a single insurance company, 
and a law firm. No comments were received from parties with bankruptcy 
claims pending against carriers that were previously authorized to 
self-insure.

A. The Propriety of Retaining the Self-Insurance Program

    The carriers, their associations, and the sole commenting insurance 
company argue that self-insurance should be retained. Apart from 
illustrating the carrier benefits derived from the program, several 
commenters contend that as long as the Federal requirement for 
mandatory insurance remains in place, the self-insurance option should 
remain available to qualified applicants. The National Association of 
Independent Insurers and the commenting law firm urge repeal of the 
self-insurance program, and the Advocates for Highway and Auto Safety 
call into question the entire mandatory insurance requirement for motor 
carriers. The issue concerning mandatory insurance is clearly beyond 
the scope of this proceeding and, accordingly, the FHWA makes no 
comment on the proposal offered by the Advocates for Highway and Auto 
Safety. Nevertheless, the mandatory insurance requirement is a relevant 
consideration in attempting to determine the propriety of retaining the 
self-insurance authorization. The FHWA is persuaded by the equity of 
the carriers' contention that the continued existence of the mandatory 
requirement justifies the self-insurance option for qualified 
applicants.

B. Proposed Changes in Security Requirements and Fee Proposals

    For the most part, the carriers and carrier associations dispute 
that any problems with the self-insurance program exist and object to 
the alteration of security and reporting requirements, and the 
imposition of additional fees. In support of this proposition, 
commenters argue that the ICC Termination Act of 1995 (ICCTA) (Pub. L. 
No. 104-88, 109 Stat. 803) prohibits the imposition of additional 
requirements on carriers already granted authorization to self-insure. 
Several carriers also contend that the monitoring fees are 
discriminatory since the FHWA does not assess a fee for insurance 
filings. Some carriers indicated that reasonable charges reflecting the 
actual expenses incurred in dealing with special modifications should 
be recovered.
    The provision of the ICCTA which applies to the issue raised by the 
complaining carriers, 49 U.S.C. 13906(d), provides: ``Motor carriers 
which have been granted authority to self-insure as of the effective 
date of this section shall retain that authority unless, for good cause 
shown and after notice and an opportunity for a hearing, the Secretary 
[of Transportation] finds that the authority must be revoked.'' This 
section merely provides that challenges to a self-insurance grant must 
be made on a case-by-case basis. Further, each self-insurance 
authorization contains a condition which provides that the FHWA retains 
the authority to terminate the authorization when it appears that the 
carrier's financial arrangements fail to provide satisfactory 
protection to the public. Another condition authorizes the FHWA to 
require the carrier to submit any additional information the FHWA deems 
necessary. Clearly, the FHWA retains the authority to impose additional 
requirements where circumstances justify such action.
    The FHWA does not agree with the contention that the imposition of 
monitoring fees on carriers holding self-insurance authorizations is 
prohibited. The carriers seek to equate the monitoring fees with a new 
qualification that would be imposed on all self-insured carriers. The 
imposition of a fee has nothing to do with a carrier's qualifications 
to self-insure. Certainly, the carriers could not seriously contend 
that the monitoring fee presents a barrier to self-insured operations, 
given the required showing of financial fitness.
    Several commenters have questioned the ability of the FHWA to 
conduct the necessary oversight. The FHWA has hired an investment 
banking firm (the firm) to conduct the yearly monitoring and 
application analysis in an effort to upgrade the quality of the 
financial reviews. Decisions regarding authorizations and continued 
compliance will still be made by the FHWA staff based on the 
information provided by the contractor. The decision to employ a 
contractor was designed to accomplish two purposes: (1) to upgrade the 
quality of the financial analysis and oversight; and (2) to provide the 
resources to ensure that the necessary tasks were accomplished in a 
timely manner.3
    The firm's charges for the quarterly and annual compliance review 
amount to $2,600 per carrier. The charges can be broken down as 
follows:

              Fees To Monitor Existing Self-Insured Carrier
------------------------------------------------------------------------
                                                        Hourly
    Annual monitoring fee-existing carrier      Hours    rate     Total
------------------------------------------------------------------------
Clerical.....................................     2.5   $34.40    $86.00
Financial and claims analysis................    10.0    91.40    914.00
Report preparation...........................    12.0    91.40  1,096.80
Principal consultant.........................     1.0   177.39    177.39
Director.....................................     1.0   249.47    249.47
                                              --------------------------
  Total......................................    26.5  .......  2,523.66
------------------------------------------------------------------------

    The contractor conducts a complete carrier review regardless of the 
number of carriers conducting operations under a parent. Each carrier 
retains its own authorization and must comply with various conditions. 
Currently, the self-insurance monitoring costs are subsidized by the 
fees generated from new carrier applicants. Despite carrier claims to 
the contrary, the FHWA assesses a fee to cover the cost of each 
insurance filing made on behalf of carriers operating with commercial 
insurance to ensure accuracy. The FHWA finds nothing in the ICCTA that 
would bar the imposition of reasonable fees to recover costs associated 
with monitoring the self-insurance conditions. Failure to recover the 
annual monitoring costs would continue the unfair cross subsidization 
of the self-insurance program by carriers that do not enjoy its 
benefits. The proposed monitoring fee would be due on the filing date 
of the carrier's annual report [90 days after the end of the reporting 
year].
    The recent financial failures of three self-insured carriers have 
caused the FHWA to reevaluate its ability to properly monitor the 
financial condition of carriers and insure that continued operations 
will generate sufficient funds to pay self-insurance claims. Since 
proration and disbursement of trust funds is still pending in two 
cases, the FHWA deems comment on the impact

[[Page 24125]]

of the proceedings to be inappropriate at this time, especially since 
none of the affected parties have filed comments in this proceeding. 
The FHWA considers any self-insured carrier's financial failure to be a 
breach of the integrity of the program, as well as imposing an 
unanticipated and unjustifiable risk on the public. In this regard, the 
FHWA considers carrier comments that all business activities generate 
risks to be unpersuasive. Since the FHWA is charged with administering 
the self-insurance program, it must insure that the public is 
adequately protected from uncompensated losses generated by carriers 
authorized by the FHWA to continue to conduct self-insured operations.

C. The Proposal To Extend the Automatic Revocation Provision to 45 Days 
for Carriers That Lose Their Satisfactory Safety Rating

    No commenters objected to extending the 30-day automatic expiration 
provision for carriers with less than satisfactory safety ratings to 45 
days. Two carriers suggested that the FHWA regional staff be authorized 
to waive the automatic expiration provision if no connection is found 
between the safety rating and self-insured operations. The FHWA 
believes that the 45 day period will provide the field staff with 
sufficient opportunity to upgrade a carrier's rating if necessary 
corrective action has been undertaken. Accordingly, further discretion 
to waive the expiration provision would not be necessary.

III. The FHWA Proposals

    The FHWA does not propose in this proceeding any additional 
requirements which self-insured carriers must meet regardless of their 
current financial condition. Instead, the FHWA seeks public comment on 
a ``minimum financial fitness standard'' that should be satisfied by 
all carriers authorized to self-insure their motor carrier operations. 
Failure to meet this measure of financial fitness would establish that 
the carrier does not have in place sufficient financial arrangements to 
protect the public against uncompensated losses as required in each 
self-insurance authorization. The standard would require each carrier 
to generate from operations, after payment of all expenses except 
annual self-insurance claims expenses, sufficient cash flow to pay 
twice the amount of the self-insured claims. Carriers that failed to 
meet this standard would be required to provide adequate collateral to 
cover their outstanding claims liability. Unfunded letters of credit 
would no longer be accepted. At the very least, the FHWA would require 
the execution of a letter of credit with a ``hard draw'' (mandatory 
drawdown) provision which would automatically fund a standby trust if 
self-insured operations ceased, or if bankruptcy proceedings were 
initiated. The time provided for the funding of such collateral would 
be determined on a case-by-case basis.
    In addition, such carriers would be required to submit an 
independent annual certified claims reports. The FHWA plans to issue an 
order at a later date that would require carriers authorized to self-
insure to file the independent annual certified claims report. That 
order would also contain the filing date and any related conditions 
that must be met. The FHWA believes that failure to retain sufficient 
cash to comfortably cover current claims payments is sufficient 
justification for concluding that the carrier's financial arrangements 
fail to provide satisfactory protection to the public as required by 
each self-insurance authorization. This is especially true since 
virtually none of the carriers authorized to self-insure maintain 
sufficient collateral to cover existing reserves for outstanding self-
insurance claims. While the FHWA has the authority to reconsider any 
self-insurance authorization on a case-by-case basis, public comment on 
the proposed financial fitness standard is nevertheless solicited.
    With respect to fees for modification of self-insurance 
authorizations, the FHWA proposes to assess a fee of $2,500 based upon 
the following contractor's cost analysis:

             Fees To Modify Existing Carrier's Authorization
------------------------------------------------------------------------
                                                        Hourly
    Changes/modifications-existing carrier      Hours    rate     Total
------------------------------------------------------------------------
Clerical.....................................       2   $34.40    $68.80
Financial and claims analysis................      10    91.40    914.00
Report preparation...........................      10    91.40    914.00
Principal consultant.........................       2   177.39    354.78
Director.....................................       1   249.47    249.47
                                              --------------------------
    Total....................................      25  .......  2,501.05
------------------------------------------------------------------------

    In addition, the FHWA proposes to reduce the application fee for 
BI&PD self-insurance to $3,000 based upon the following cost analysis:

              Fees for New Self-Insured Carrier Application
------------------------------------------------------------------------
                                                        Hourly
            New carrier application             Hours    rate     Total
------------------------------------------------------------------------
Clerical......................................  1.5     $34.40    $51.60
Financial and claims analysis.................   15      91.40  1,371.00
Report preparation............................   10      91.40    914.00
Principal consultant..........................    2     177.39    354.78
Director......................................    1     249.47    249.47
                                               -------------------------
    Total.....................................   29    .......  2,940.85
------------------------------------------------------------------------

    All proposed fees are based on recovery of contractor costs. The 
FHWA does not propose to recover its own labor costs because the amount 
will likely vary depending on the amount of time needed for review and 
decisionmaking.
    Section 387.309 of title 49, CFR, provides that ``any self-
insurance authority granted by the Commission [now the FHWA] will 
automatically expire 30 days after a carrier receives a less than 
satisfactory rating from DOT.'' No objections to FHWA's proposal to 
extend the period to 45 days were lodged by the commenters. 
Accordingly, the FHWA reiterates this proposal.

Rulemaking Analyses and Notices

    All comments received before the close of business on the comment 
closing date shown above will be considered and will be available for 
examination in the FHWA Docket at the above address. Comments received 
after the comment closing date will be filed in the FHWA Docket 
identified above and will be considered to the extent practicable, but 
the FHWA may issue a final rule any time after the close of the comment 
closing period. In addition to late comments, the FHWA will also 
continue to file in the docket relevant information that becomes 
available after the comment closing date, and interested persons should 
continue to examine the docket for new material.

Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    The FHWA has initially determined that this document contains a 
significant regulatory action under Executive Order 12866 and under the 
Department of Transportation's policies and procedures because this 
NPRM may raise novel legal or policy issues arising out of legal 
mandates. The NPRM is also significant because it has substantial 
public interest. The public has no reasonable means of challenging a 
self-

[[Page 24126]]

insured authorization and is not likely to know which motor carriers 
are self-insured. As discussed above, this NPRM would adopt a financial 
fitness standard for carriers authorized to self insure their 
operations and would enable the FHWA to take timely remedial action to 
prevent carrier defaults on self-insurance claims. In addition, this 
rule would institute additional nominal fees to recoup expenses 
associated with the contractor's participation in the self-insurance 
program.
    Executive Order 12866 requires that regulatory agencies assess both 
the costs and benefits of intended regulations, and propose regulations 
on the basis that the benefits justify the costs. The proposed 
regulation is designed to provide notice and guidance to a group of 
approximately 55 motor carriers authorized to self-insure their 
operations, 9 of which have authorizations which cover cargo-only 
liability. This proposed rule merely codifies the authority the FHWA 
already possesses to administer the self-insurance program. The 
recommended ``yearly'' monitoring fee of $2,600 is simply designed to 
recoup costs associated with the analysis performed by a contractor. 
The FHWA estimates the annual cost for the contractor to monitor 
existing self-insured carriers at $143,000 (55 carriers  x  $2,600). 
While we do not expect all 55 carriers that self-insure to request 
modifications or alterations to their existing authorizations, the FHWA 
estimates the costs for such analyses at $137,500 if all carriers were 
to do so. Thus, for purposes of Executive Order 12866, this rulemaking 
does not impose an economic burden greater than $100 million on motor 
carriers that self-insure.
    It is also important to note that carriers authorized to self-
insure obtain a substantial economic benefit by not having to maintain 
commercial insurance coverage in the federally mandated amounts. The 
vast majority of these carriers self-insure at the $1,000,000 level 
which corresponds to the required level of coverage. These carriers, as 
well as the public, benefit from the existence of a comprehensive 
monitoring program designed to insure that all carriers authorized to 
self-insure comply with the terms of their authorizations. Only 
carriers maintaining an outstanding financial condition should be 
authorized to self-insure their operations. The gross revenues 
generated by carriers holding the BI&PD authorizations range from 
$8,396,000 to $1,207,601,000, or an average of $174,345,468. These 
carriers are exposed to an average claims balance of $3,412,882. The 
proposed yearly monitoring fee, therefore, would have little impact on 
these carriers given their financial strength. Thirteen entities 
include from two to seven self-insured carriers and each carrier would 
be required to pay the yearly monitoring fee. Nevertheless, the payment 
of multiple fees by these carrier groups would have little or no impact 
on their financial conditions. To argue otherwise would call into 
question their qualifications to self-insure. Requests for 
modifications of self-insurance authorizations are infrequent and the 
proposed fees should add little or no burden to the carriers since the 
requested modification would likely create a new financial benefit. For 
example, the benefits created by a reduction in the back-up collateral 
amount, the increase of the authorization amount, and the addition of 
additional carriers to the authorization, would all provide financial 
benefits far in excess of the one-time modification fee. Lastly, the 
reduced application fee from $4,200 to $3,000 would provide a modest 
benefit and cost savings to all future applicants. Overall, the FHWA 
has designed the thrust of its recommended proposals to provide the 
general public with greater protection from the likelihood of 
sustaining uncompensated losses resulting from an accident involving a 
self-insured carrier.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the FHWA has evaluated the effects of this rule on small 
entities. The proposed regulatory changes would have little or no 
effect on small entities since they do not participate in the bodily 
injury and property damage self-insurance program. The small entities 
that self-insure their operations only seek cargo coverage and would 
not be affected by any of the proposals, because the financial 
requirements for obtaining a cargo-only authorization are far less 
stringent than for BI&PD applicants. Further, the FHWA is unaware of 
any default by a cargo-only self-insurer. Accordingly, the FHWA 
certifies that this action would not have a significant economic impact 
on a substantial number of small entities.

Unfunded Mandates Reform Act

    The FHWA has initially determined that this proposed rule does not 
impose any unfunded mandates on State, local, or tribal governments in 
the aggregate, or by the private sector, of $100 million or more in any 
one year, as required by the Unfunded Mandates Reform Act of 1995 (2 
U.S.C. 1532).

Executive Order 12612 (Federalism Assessment)

    This action has been analyzed in accordance with the principles and 
criteria contained in Executive Order 12612 and it has been determined 
that this action does not have sufficient federalism implications to 
warrant the preparation of a federalism assessment.

Executive Order 12372 (Intergovernmental Review)

    Catalog of Federal Domestic Assistance Program Number 20.217, Motor 
Carrier Safety. The regulations implementing Executive Order 12372 
regarding intergovernmental consultation on Federal programs and 
activities do not apply to this program.

Paperwork Reduction Act

    This proposal amends an existing collection of information 
requirement for purposes of the Paperwork Reduction Act of 1995, 44 
U.S.C. 3501-3520. The proposed rule would add additional requirements 
to the Office of Management and Budget's (OMB) approved budget for OMB 
Control Number FHWA 2125-0570, in the form of a certified claims 
report. The Form BMC-40, Application to Self-Insure under 49 U.S.C. 
13906, is the application form used by carriers to apply for self-
insurance authority. The proposed rule would not add additional 
requirements to the application.
    The proposed independent certified annual claims report would 
amount to a limited additional collection of information requirement 
because it would only be imposed in remedial situations involving no 
more than four or five carriers at any one time. Further, it will only 
be imposed when circumstances warrant. The estimate of four or five 
carriers is based upon a maximum eight percent of carriers evidencing 
financial difficulties. The FHWA further estimates that 50 percent of 
these carriers authorized to self-insure would eventually leave the 
self-insurance program altogether. Carriers in the remedial program 
that failed to improve their financial condition would eventually lose 
the self-insurance authorization. Consequently, even if new carriers 
entered the remedial program, the total number of participants would 
remain fairly constant. The FHWA estimates that 40 hours would be 
required to complete the certified claims report. Thus, 40 hours 
multiplied by the anticipated 5 carriers would result in total burden 
hours of no more than 200.

[[Page 24127]]

    Organizations and individuals desiring to submit comments on the 
information collection requirements concerning the additional certified 
claims report must direct them to the Docket Clerk, U.S. DOT Dockets, 
Room PL-401, 400 Seventh Street, SW., Washington, D.C. 20590-0001.

National Environmental Policy Act

    The agency has analyzed this action for the purpose of the National 
Environmental Policy Act of 1969, as amended (42 U.S.C. 4321 et seq.) 
and has determined that this action will not have any effect on the 
quality of the environment.

Regulation Identification Number

    A regulation identification number (RIN) is assigned to each 
regulatory action listed in the Unified Agenda of Federal Regulations. 
The Regulatory Information Service Center publishes the Unified Agenda 
in April and October of each year. The RIN contained in the heading of 
this document can be used to cross reference this action with the 
Unified Agenda.

List of Subjects

49 CFR Part 360

    Administrative practice and procedure, Fees, Insurance, Motor 
carriers.

49 CFR Part 387

    Commercial motor vehicles, Freight forwarders, Hazardous materials 
transportation, Insurance, Motor carriers, Penalties, Reporting and 
recordkeeping requirements, Surety bonds.

    Issued on: April 27, 1999.
Gloria J. Jeff,
Federal Highway Deputy Administrator.

    In consideration of the foregoing, the FHWA proposes to amend title 
49, Code of Federal Regulations, Chapter III, part 360 and 
Sec. 387.309, as set forth below:

PART 360--[AMENDED]

    1. Revise the authority citation for part 360 to read as follows:

    Authority: 5 U.S.C. 552(a)(4)(A) and 553; 31 U.S.C. 9701; 49 
U.S.C. 13908(c) and 14504(c)(2); and 49 CFR 1.48.

    2. Amend Sec. 360.3(f) by revising item number (50) under part II, 
Insurance, to read as follows:


Sec. 360.3  Filing fees.

* * * * *
    (f) Schedule of filing fees. 
* * * * *

Type of Proceeding:                                                 Fee
 
             *         *           *           *           *
Part II: Insurance:
 
             *         *           *           *           *
(50)
  (i) An application for original qualification as self-insurer    3,000
   for bodily injury and property damage insurance (BI&PD)......
  (ii) An application for original qualification as self-insurer     420
   for cargo insurance..........................................
  (iii) Modification of self-insurance authorization............   2,500
  (iv) Self-insurance compliance monitoring fee.................   2,600
 

* * * * *
    3. Add Sec. 360.7 to read as follows:


Sec. 360.7  Insurance service fee account.

    (a)(1) Manner of payment. The service fee for insurance, surety or 
self-insurer accepted certificate of insurance, surety bond or other 
instrument submitted in lieu of a broker surety bond must be charged to 
an insurance service account established by the Federal Highway 
Administration in accordance with paragraph (a)(2) of this section.
    (2) Billing account procedure. A written request must be submitted 
to the Office of Motor Carrier Information Analysis, Licensing and 
Insurance Division, to establish an insurance service fee account.
    (i) Each account will have a specific billing date within each 
month and a billing cycle. The billing date is the date that the bill 
is prepared and printed. The billing cycle is the period between the 
billing date in one month and the billing date in the next month. A 
bill for each account which has activity or an unpaid balance during 
the billing cycle will be sent on the billing date each month. Payment 
will be due 20 days from the billing date. Payments received before the 
next billing date are applied to the account. Interest will accrue in 
accordance with 4 CFR 102.13.
    (ii) The Debt Collection Act of 1982, including disclosure to the 
consumer reporting agencies and the use of collection agencies, as set 
forth in 4 CFR 102.5-102.6 will be utilized to encourage payment where 
appropriate.
    (iii) An account holder who files a petition in bankruptcy or who 
is the subject of a bankruptcy proceeding must provide the following 
information to the Office of Motor Carrier Information Analysis, 
Licensing and Insurance Division:
    (A) The filing date of the bankruptcy petition;
    (B) The court in which the bankruptcy petition was filed;
    (C) The type of bankruptcy proceeding;
    (D) The name, address, and telephone number of its representative 
in the bankruptcy proceeding; and
    (E) The name, address, and telephone number of the bankruptcy 
trustee, if one has been appointed.
    (3) Payment of fees by check, money order, or credit card. Fees 
will by payable to the Federal Highway Administration by a check 
payable in United States currency drawn upon funds deposited in a 
United States or foreign bank or other financial institution, money 
order payable in United States currency, or credit card (VISA or 
MASTERCARD).
    (b) Deferred payment of filing fee. Any filing that is not 
accompanied by the appropriate filing fee is deficient except for 
filings that satisfy the deferred payment procedures in paragraph (a) 
of this section.
    (c) Fees not refundable. Fees will be assessed for every filing in 
the type of proceeding listed in the schedule of fees contained in part 
II of the table in Sec. 360.3(b). Fees are generally not refundable.

PART 387--[AMENDED]

    4. The authority citation for part 387 continues to read as 
follows:

    Authority: 49 U.S.C. 13101, 13301, 13906, 14701, 31138, and 49 
U. S.C. 31139; and 49 CFR 1.48.

    5. Amend paragraphs (a) and (b) of Sec. 387.309 by revising the 
word ``Commission'' to read ``Federal Highway Administration'; amend 
paragraph (a)(3) by revising the words ``30 days'' to read ``45 days'; 
and add paragraph (c) to read as follows:


Sec. 387.309  Qualification as a self-insurer and other securities or 
agreements.

* * * * *
    (c) Continued financial fitness. Carriers authorized to self-insure 
their bodily injury and property damage liability that fail to generate 
from operations at least twice the cash flow of the amount of self-
insured claims paid in the most recent 12 month period as reported to 
the FHWA, will be required to increase the collateral required by the 
self-insurance authorization to a level equaling the outstanding self-
insured claims liability in order to provide the necessary financial 
arrangements to protect the public from exposure to uncompensated 
losses. Unfunded letters of credit will not be accepted from carriers 
in this financial condition. The time provided for the increased 
collateral funding will be established on a case-by-case basis. These 
carriers will be required to submit annual certified reports confirming 
the

[[Page 24128]]

accuracy of the outstanding self-insurance claims liability.

[FR Doc. 99-11212 Filed 5-4-99; 8:45 pm]
BILLING CODE 4910-22-P