[Federal Register Volume 65, Number 157 (Monday, August 14, 2000)]
[Rules and Regulations]
[Pages 49505-49507]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20480]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 544

[Docket No.: 2000-001; Notice 02]
RIN 2127-AH77


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 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 1997 calendar year not later than October 25, 
2000.

DATES: Effective Date: The final rule is effective August 14, 2000.
    Reporting Date: Insurers listed in the appendices are required to 
submit three copies of their reports on CY 1997 experience on or before 
October 25, 2000. Previously listed insurers whose names are removed by 
this notice need not submit reports for CY 1997. Insurers newly listed 
in this final rule must submit their reports for calendar year 1997 on 
or before October 25, 2000. 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. Deborah Mazyck, Office of Planning 
and Consumer Programs, NHTSA, 400 Seventh Street, SW., Washington, DC 
20590. Ms. Mazyck's telephone number is (202) 366-4809. 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 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.

[[Page 49506]]

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 April 7, 2000, NHTSA published a notice of proposed rulemaking 
(NPRM) to update the list of insurers in Appendices A, B, and C 
required to file reports (65 FR 18267). Appendix A of the NPRM listed 
those 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 October 25, 1999 (See 64 FR 
57393). Based on the 1997 calendar year data from A.M. Best, NHTSA 
proposed to reissue Appendix A without change.
    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, 2000, setting forth the information required by part 544 for each 
State in which it did business in the 1997 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 1997, because each 
insurer had a 10 percent or a greater market share of motor vehicle 
premiums in those States. Based on the 1997 calendar year A.M. Best's 
data for market shares, NHTSA proposed to reissue Appendix B without 
change.
    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, 2000 
on their calendar year 1997 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 1997, the most recent year for which data are 
available, NHTSA proposed one change 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, NHTSA proposed to remove the Penske Truck Leasing Company 
from Appendix C and add Ford Rent-A-Car System to 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 1997 no later than October 25, 2000, 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 no comments. 
Accordingly, this final rule adopts the proposed changes to Appendices 
A, B, and C.

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 Bureau of Labor 
Statistics Consumer Price Index for 1999, the cost estimates in the 
1987 final regulatory evaluation were adjusted for inflation. The 
agency estimates that the cost of compliance is $83,300 for any insurer 
added to Appendix A, $33,320 for any insurer added to Appendix B, and 
$9,613 for any insurer added to Appendix C. In this final rule, for 
Appendix A, the agency made no changes; for Appendix B, the agency made 
no changes; and for Appendix C, the agency would add one company and 
remove one company. The

[[Page 49507]]

agency therefore estimates that the net effect of this final rule will 
be no cost to insurers, as a group.

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 August 31, 2003.

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, 2000 would 
contain the required information for the 1997 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, 
Hartford Insurance Group, Liberty Mutual Group, Nationwide Group, 
Progressive Group, Prudential of America Group, State Farm Group, 
Travelers PC Group, 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., AT&T Automotive Services, Inc., Avis, Inc., Budget 
Rent-A-Car Corporation, Dollar Rent-A-Car Systems, Inc., Donlen 
Corporation, Enterprise Rent-A-Car, Ford Rent-A-Car Systems, 
Inc.,\1\ GE Capital Fleet Services, Hertz Rent-A-Car Division 
(subsidiary of Hertz Corporation), Lease Plan USA, Inc., National 
Car Rental System, Inc., PHH Vehicle Management Services, Ryder 
System, Inc. (both rental and leasing operations), U-Haul 
International, Inc. (Subsidiary of AMERCO), USL Capital Fleet 
Services, Wheels Inc.
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    \1\ Indicates a newly listed company which must file a report 
beginning with the report due on October 25, 2000.

    Issued on: August 8, 2000.
Stephen R. Kratzke,
Associate Administrator for Safety Performance Standards.
[FR Doc. 00-20480 Filed 8-11-00; 8:45 am]
BILLING CODE 4910-59-P