[Federal Register Volume 64, Number 205 (Monday, October 25, 1999)]
[Rules and Regulations]
[Pages 57393-57397]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-27514]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 544

[Docket No.: 99-001; Notice 02]
RIN 2127-AH62


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 lists 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. Each insurer listed must file a report for the 1996 
calendar year not later than October 25, 1999.

DATES: This final rule is effective October 25, 1999.
    Reporting Date: Insurers listed in the appendices are required to 
submit their reports on CY 1996 experience on or before October 25, 
1999. Previously listed insurers whose names are removed by this notice 
need not submit reports for CY 1996. Insurers newly listed in this 
final rule must submit their reports for calendar year 1996 on or 
before October 25, 1999. 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. Henrietta L. Spinner, Office of 
Planning and Consumer Programs, NHTSA, 400 Seventh Street, SW, 
Washington, DC 20590. Ms. Spinner's telephone number is (202) 366-4802. 
Her fax number is (202) 493-2290.

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

[[Page 57394]]

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
    (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 that 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 
subjected to reporting instead of relatively numerous self-insurers 
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 14, 1999, NHTSA published a notice of proposed rulemaking 
(NPRM) to update the list of insurers in Appendices A, B, and C 
required to file reports (64 FR 26352). Based on the 1996 calendar year 
A.M. Best data for market shares, NHTSA proposed to amend the listing 
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 December 18, 1998 
(See 63 FR 70051). Three companies, Aetna Life & Casualty Group, Safeco 
Insurance Companies, and Travelers Insurance Group, were proposed to be 
removed from Appendix A. One company, Travelers PC Group, was proposed 
to be added.
    Under part 544, each of the 18 insurers listed in Appendix A of the 
NPRM would have been required to file a report not later than October 
25, 1999, setting forth the information required by Part 544 for each 
State in which it did business in the 1996 calendar year. As long as 
those 18 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 1996, because each 
insurer had a 10 percent or a greater market share of motor vehicle 
premiums in those States. Based on the 1996 calendar year A.M. Best's 
data for market shares, it was proposed that Island Insurance Group, 
reporting on its activities in the State of Hawaii be removed from 
Appendix B.
    Under part 544, each of the 11 insurers listed in Appendix B of the 
NPRM would have been required to report no later than October 25, 1999, 
on their calendar year 1996 activities in every state in which they had 
a 10 percent or greater market share, and set forth the information 
required by Part 544. As long as those 11 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 1996, the most recent year for which data are 
available, NHTSA proposed one change in Appendix C. As

[[Page 57395]]

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 one rental and leasing 
company, Citicorp Bankers Leasing Corporation, be removed from Appendix 
C.
    Under part 544, each of the 19 companies (including franchisees and 
licensees) listed in Appendix C would have been required to file 
reports for calendar year 1996 no later than October 25, 1999, and set 
forth the information required by part 544. As long as those 19 
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

1. Insurers of Passenger Motor Vehicles

    In response to the NPRM, the agency received two comments. Both 
commentors were companies listed in the May 1999 NPRM. Each commentor 
questioned the appropriateness of its inclusion in one of the 
appendices.
    Travelers Property Casualty Corporation (Travelers) wrote to 
request that it not be included in Appendix A. As stated, NHTSA's 
proposal to include Travelers was based on market share data provided 
by A.M. Best. Travelers wrote that it was created following the 
purchase by Travelers of Aetna Life and Casualty's property casualty 
business on April 2, 1996. Since Traveler's acquisition of Aetna in 
1996, the companies have integrated its auto insurance products, 
reentered some states from which each had previously withdrawn, and 
achieved solid growth under the Travelers Property Casualty Corporation 
banner. The insurer, Travelers, believes that because the business was 
not consolidated until 1999, compiling the data required for reporting 
for the years prior to CY 1999 would be extremely burdensome, and in 
some cases, it might not even be possible.
    The agency notes Travelers request for an exemption from the 
October 25, 1999, 2000 and 2001 insurer reporting requirements. 
However, the agency does not believe that Travelers meets any of the 
exemption requirements provided under U.S.C. 33112(e)(1) and (2). The 
agency does not believe that the cost of preparing and furnishing this 
report will be excessive in relation to the size of the insurer's 
business. Additionally, the agency believes that because Travelers' 
insurer information would contribute significally to the agency's 
statutory requirements, it should submit a report of its CY 1996 
insurer information and adhere to the reporting requirements for any 
subsequent years it is required to report. Since Travelers does not 
meet the criteria for exemption, NHTSA determines that Travelers should 
remain listed on Appendix A. Additionally, the agency was subsequently 
notified that the GEICO Corporation Group, an insurance entity, became 
a wholly owned subsidiary of Berkshire Hathaway Inc. Therefore, both 
names will be listed on Appendix A, but the GEICO Corporation Group 
will continue to report for purposes pursuant to 49 U.S.C. 33112.
    Nodak Mutual Insurance Company (Nodak) in North Dakota wrote to 
request that it not be listed in Appendix B. Nodak indicated that it is 
not the largest writer of automobiles in the state of North Dakota, 
although it is the largest property/casualty insurer in that state. The 
insurer stated that the subject report relates strictly to automobiles, 
and, therefore, it does not feel the company is in the best position to 
make comments on stolen vehicles. Nodak stated that it has few auto 
theft claims, and it does not have any great bearing on the statistics. 
For instance, in calendar years 1994 and 1995, Nodak reported 14 and 18 
stolen vehicles respectively. It believes that the small amount of the 
vehicles stolen affecting its company would have no bearing on 
nationwide statistics. Further, Nodak feels that the efforts they would 
take to acquire statistics of this nature would be an undue hardship 
considering the lack of effect its information would have on the 
statistical data gathered nationwide. Finally, Nodak stated that it is 
a small company and is not in a position to take steps on a nationwide 
basis to promote programs that deter theft.
    The agency notes Nodaks' rationale that its auto theft has declined 
over the past year and the undue hardship it believes it will endure to 
provide the required insurer information. The agency also notes Nodak's 
comment that it believes it is not in the best position to comment on 
stolen vehicles because while it is the largest property/casualty 
insurer in North Dakota, it is not the largest writer of automobiles in 
the state of North Dakota. Therefore, Nodak requests to be exempted 
from further insurer reporting requirements. However, the agency has 
determined that the exemption authority provided in section 33112(e)(1) 
and (2) should not be applied to this insurer. Nodak does not qualify 
as a ``small insurer'' because its total premiums written exceed 10 
percent of the total written in North Dakota. As defined 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 the 
insurers in any State. 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. Additionally, the agency believes that the cost of 
preparing and furnishing this report would not be excessive in relation 
to the size of the insurers' business. The agency also notes that there 
have been several other companies similar in premium size for a given 
State who have experienced anywhere from none to a very few thefts and 
have continued to provide the required insurer information in a timely 
fashion. Therefore, because the agency believes that the submission of 
Nodaks' required information will not be excessive in relation to the 
size of its business, and that its report will contribute to carrying 
out the agency's statutory requirements, the agency has determined that 
the Nodak Mutual Insurance Company should remain on Appendix B.
    After reviewing the public comments and in making the appropriate 
adjustment to Appendix B, NHTSA has determined that each of the 18 
insurers listed in Appendix A, each of the 11 insurers in Appendix B, 
and each of the 19 insurers listed in Appendix C, are required to 
submit an insurer report under Part 544. Each listed insurer must 
report on its experience for calendar year 1996, 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 required to file reports.
    NHTSA does not believe that this rule, reflecting more current 
data, affects

[[Page 57396]]

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 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 one insurer and remove three insurers; for Appendix B, 
the agency would remove one insurer; and for Appendix C, the agency 
would remove one company. The agency therefore estimates that the net 
effect of this final rule will be a cost decrease to insurers, as a 
group of approximately $125,770.

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 included in 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 1 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 according to the principles and 
criteria contained in Executive Order 12612, and it has been determined 
that the 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 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 (e.g., the report due by October 25, 1999 would 
contain the required information for the 1996 calendar year).
* * * * *
    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

Allstate Insurance Group
American Family Insurance Group
American Financial Group
American International Group
California State Auto Association
CNA Insurance Group
Erie Insurance Group
Farmers Insurance Group
Berkshire Hathaway/GEICO Corporation Group
GEICO Corporation Group
Hartford Insurance Group
Liberty Mutual Group
Nationwide Group
Progressive Group
Prudential of America Group
State Farm Group
Travelers PC Group \1\
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    \1\ Indicates a newly listed company which must file a report 
beginning with the report due on October 25, 1999.
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USAA Group
Zurich Insurance Group-U.S.

    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)
Arbella Mutual Insurance (Massachusetts)
Auto Club of Michigan Group (Michigan)
Commerce Group, Inc. (Massachusetts)
Commercial Union Insurance Companies (Maine)
Concord Group Insurance Companies (Vermont)
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.
A T & T Automotive Services, Inc.
Avis, Inc.
Budget Rent-A-Car Corporation
Dollar Rent-A-Car Systems, Inc.
Donlen Corporation
Enterprise Rent-A-Car
GE Capital Fleet Services
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

[[Page 57397]]

Ryder System, Inc. (Both rental and leasing operations)
U-Haul International, Inc. (Subsidiary of AMERCO)
USL Capial Fleet Services
Wheels Inc.

    Issued on: October 15, 1999.
Stephen R. Kratzke,
Acting Associate Administrator for Safety Performance Standards.
[FR Doc. 99-27514 Filed 10-22-99; 8:45 am]
BILLING CODE 4910-59-P