[Federal Register Volume 70, Number 141 (Monday, July 25, 2005)]
[Rules and Regulations]
[Pages 42505-42508]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-14139]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 544

[Docket No.: NHTSA-2004-20484]
RIN 2127-AJ54


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 amends regulations on insurer reporting 
requirements. The appendices list those passenger motor vehicle 
insurers that are required to file reports on their motor vehicle theft 
loss experiences. An insurer included in any of these appendices must 
file three copies of its report for the 2002 calendar year before 
October 25, 2005. If the passenger motor vehicle insurers remain 
listed, they must submit reports by each subsequent October 25.

DATES: This final rule becomes effective on September 23, 2005. 
Insurers listed in the appendices are required to submit reports before 
October 25, 2005.

FOR FURTHER INFORMATION CONTACT: Rosalind Proctor, Office of 
International Policy, Fuel Economy and Consumer Programs, NHTSA, 400 
Seventh Street, SW., Washington, DC 20590, by electronic mail to 
[email protected]. Ms. Proctor's telephone number is (202) 
366-0846. Her fax number is (202) 493-2290.

SUPPLEMENTARY INFORMATION:

I. 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 
regulation, 49 CFR part 544, the following insurers are subject to the 
reporting requirements:
    (1) 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) 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 exempted 
certain passenger motor vehicle insurers from the reporting 
requirements.

A. Small Insurers of Passenger Motor Vehicles

    Section 33112(f)(2) provides that the agency shall exempt small 
insurers of passenger motor vehicles if NHTSA finds that such 
exemptions will not significantly affect the validity or usefulness of 
the information in the reports, either nationally or on a state-by-
state basis. The term ``small insurer'' is defined, in Section 
33112(f)(1)(A) and (B), as an insurer whose premiums for motor vehicle 
insurance issued directly or through an affiliate, including pooling 
arrangements established under state law or regulation for the issuance 
of motor vehicle insurance, account for less than 1 percent of the 
total premiums for all forms of motor vehicle insurance issued by 
insurers within the United States. However, that section also 
stipulates that if an insurance company satisfies this definition of a 
``small insurer,'' but accounts for 10 percent or more of the total 
premiums for all motor vehicle insurance issued in a particular state, 
the insurer must report about its operations in that state.
    In the final rule establishing the insurer reports requirement (52 
FR 59; January 2, 1987), 49 CFR part 544, NHTSA exercised its exemption 
authority by listing in Appendix A each insurer that 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 required to report for particular states because 
each insurer had a 10 percent or greater market share of motor vehicle 
premiums in those states. In the January 1987 final rule, the agency 
stated that it would update Appendices A and B annually. NHTSA updates 
the appendices based on data voluntarily provided by insurance 
companies to A.M. Best, which A.M. Best,\1\ publishes in its State/Line 
Report each spring. The agency uses the data to determine the insurers' 
market shares nationally and in each state.
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    \1\ A.M. Best Company is a well-recognized source of insurance 
company ratings and information. 49 U.S.C. 33112(i) authorizes NHTSA 
to consult with public and private organizations as necessary.
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B. Self-Insured Rental and Leasing Companies

    In addition, upon making certain determinations, NHTSA grants 
exemptions to self-insurers, i.e., any person who has a fleet of 20 or 
more motor vehicles (other than any governmental entity) used for 
rental or lease whose vehicles are not covered by theft insurance 
policies issued by insurers of passenger motor vehicles, 49 U.S.C. 
33112(b)(1) and (f). 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 33112(e)(1) 
and (2),
    (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 the largest companies' 
reports sufficiently represent the theft experience of rental and 
leasing companies. NHTSA concluded that smaller rental and leasing 
companies' reports do not significantly contribute to carrying out 
NHTSA's statutory obligations and that exempting such companies will 
relieve

[[Page 42506]]

an unnecessary burden on them. As a result of the June 1990 final rule, 
the agency added appendix C, consisting of an annually updated list of 
the self-insurers subject to part 544. Following the same approach as 
in Appendix A, NHTSA included, in Appendix C, each of the self-insurers 
subject to reporting instead of the self-insurers which are exempted. 
NHTSA updates Appendix C based primarily on information from Automotive 
Fleet Magazine and Auto Rental News.\2\
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    \2\ Automotive Fleet Magazine and Auto Rental News are 
publications that provide information on the size of fleets and 
market share of rental and leasing companies.
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C. When a Listed Insurer Must File a Report

    Under part 544, as long as an insurer is listed, it must file 
reports on or before October 25 of each year. Thus, any insurer listed 
in the appendices must file a report before October 25, and by each 
succeeding October 25, absent an amendment removing the insurer's name 
from the appendices.

II. Notice of Proposed Rulemaking

1. Insurers of Passenger Motor Vehicles

    On March 15, 2005, NHTSA published a notice of proposed rulemaking 
(NPRM) to update the list of insurers in Appendices A, B, and, C 
required to file reports (70 FR 12635). Appendix A lists insurers that 
must report because each had 1 percent of the motor vehicle insurance 
premiums on a national basis. The list was last amended in a final rule 
published on July 13, 2004 (69 FR 41974). Based on the 2002 calendar 
year data market shares from A.M. Best, we proposed to remove CGU Group 
and Great American P&C Group and add the Mercury General Group and 
Auto-Owners Insurance Group to Appendix A.
    Each of the 19 insurers listed in Appendix A are required to file a 
report before October 25, 2005, setting forth the information required 
by part 544 for each State in which it did business in the 2002 
calendar year. As long as these 19 insurers remain listed, they are 
required to submit a report by each subsequent October 25 for the 
calendar year ending slightly less than 3 years before.
    Appendix B lists insurers required to report for particular States 
for calendar year 2002, because each insurer had a 10 percent or 
greater market share of motor vehicle premiums in those States. Based 
on the 2002 calendar year data for market shares from A.M. Best, we 
proposed to add the Nodak Mutual Group (North Dakota) to Appendix B.
    The nine insurers listed in Appendix B are required to report on 
their calendar year 2002 activities in every State where they had a 10 
percent or greater market share. These reports must be filed by October 
25, 2005, and set forth the information required by part 544. As long 
as these nine 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

    Appendix C lists rental and leasing companies required to file 
reports. Based on information in Automotive Fleet Magazine and Auto 
Rental News for 2002, NHTSA proposed to add Enterprise Fleet Services 
and remove Alamo Rent-A-Car, Inc., National Car Rental System, Inc., 
Ryder TRS and Thrifty Rental Car System, Inc. Each of the 14 companies 
(including franchisees and licensees) listed in Appendix C are required 
to file reports for calendar year 2002 no later than October 25, 2005, 
and set forth the information required by part 544. As long as those 14 
companies remain listed, they would be required to submit reports 
before each subsequent October 25 for the calendar year ending slightly 
less than 3 years before.
Public Comments on Final Determination

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.
Submission of Theft Loss Report
    Passenger motor vehicle insurers listed in the appendices can 
forward their theft loss reports to the agency in several ways:
    a. Mail: Rosalind Proctor, Office of International Policy, Fuel 
Economy and Consumer Programs, NHTSA, NVS-131, 400 Seventh Street, SW., 
Washington, DC 20590
    b. E-Mail: [email protected]; or
    c. Fax: (202) 493-2290.
    Theft loss reports may also be submitted to the docket 
electronically by:
    d. logging onto the Dockets Management System Web site at http://dms.dot.gov. Click on ``ES Submit'' or ``Help'' to obtain instructions 
for filing the document electronically.
Regulatory Impacts

1. Costs and Other Impacts

    This notice has not been reviewed under Executive Order 12866, 
Regulatory Planning and Review. NHTSA has considered the impact of this 
proposed rule and determined that the action is not ``significant'' 
within the meaning of the Department of Transportation's regulatory 
policies and procedures. This proposed 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 proposed rule, reflecting 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 2004 (see http://www.bls.gov/cpi), 
the cost estimates in the 1987 final regulatory evaluation were 
adjusted for inflation. The agency estimates that there is no cost of 
compliance for any insurer added to appendix A, $37,780 for any insurer 
added to appendix B, and -$32,698.59 for any insurer added to appendix 
C. In this final rule, for appendix A, the agency proposed to add two 
companies and remove two companies; for appendix B, the agency proposed 
to add one company; and for appendix C, the agency proposed to remove 
four companies and add one company. The agency estimates that the net 
effect of this final rule would be a cost increase of $5,081.41 to 
insurers as a group.
    Interested persons may wish to examine the 1987 final regulatory 
evaluation. Copies of that evaluation were placed in 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.

2. Paperwork Reduction Act

    The information collection requirements in this final rule were 
submitted 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

[[Page 42507]]

information is assigned OMB Control Number 2127-0547 (``Insurer 
Reporting Requirements'') and approved for use through July 31, 2006, 
and the agency will seek to extend the approval afterwards.

3. Regulatory Flexibility Act

    The agency also considered the effects of this rulemaking under the 
Regulatory Flexibility Act (RFA) (5 U.S.C. 601 et seq.). I certify that 
this proposed rule will 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 for Appendices A, 
B, or C are 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 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, and 
section 32909 does not require submission of a petition for 
reconsideration or other administrative proceedings before parties may 
file suit in court.

7. Regulation Identifier Number (RIN)

    The Department of Transportation assigns a regulation identifier 
number (RIN) 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. You may 
use the RIN contained in the heading, at the beginning, of this 
document to find this action in the Unified Agenda.

8. Plain Language

    Executive Order 12866 requires each agency to write all rules in 
plain language. Application of the principles of plain language 
includes consideration of the following questions:
     Have we organized the material to suit the public's needs?
     Are the requirements in the proposal clearly stated?
     Does the proposal contain technical language or jargon 
that is not clear?
     Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rule easier to understand?
     Would more (but shorter) sections be better?
     Could we improve clarity by adding tables, lists, or 
diagrams?
     What else could we do to make the proposal easier to 
understand?
    If you have any responses to these questions, you can forward them 
to me several ways:
    a. Mail: Rosalind Proctor, Office of International Policy, Fuel 
Economy and Consumer Programs, NHTSA, 400 Seventh Street, SW., 
Washington, DC 20590;
    b. E-mail: [email protected]; or
    c. Fax: (202) 493-2290

List of Subjects in 49 CFR Part 544

    Crime insurance, Insurance, Insurance companies, Motor vehicles, 
Reporting and recordkeeping requirements.


0
In consideration of the foregoing, 49 CFR part 544 is amended as 
follows:

PART 544--[AMENDED]

0
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.


0
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 before 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 3 years previous to the year in which the report is 
filed (e.g., the report due by October 25, 2005 will contain the 
required information for the 2002 calendar year).
* * * * *

0
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 International Group
Auto-Owners Insurance Group \1\
California State Auto Association
CNA Insurance Companies
Erie Insurance Group
Berkshire Hathaway/GEICO Corporation Group
Hartford Insurance Group
Liberty Mutual Insurance Companies
Metropolitan Life Auto & Home Group
Mercury General Group \1\
Nationwide Group
Progressive Group
SAFECO Insurance Companies
State Farm Group
Travelers/Citigroup Company
USAA Group
Farmers Insurance Group

    \1\ Indicates a newly listed company, which must file a report 
beginning with the report due October 25, 2005.


0
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)
Arbella Mutual Insurance (Massachusetts)
Auto Club (Michigan)
Commerce Group, Inc. (Massachusetts)
Kentucky Farm Bureau Group (Kentucky)
New Jersey Manufacturers Group (New Jersey)
Nodak Mutual Group (North Dakota) \1\
Southern Farm Bureau Group (Arkansas, Mississippi)
Tennessee Farmers Companies (Tennessee)

    \1\ Indicates a newly listed company, which must file a report 
beginning with the report due October 25, 2005.


0
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

ANC Rental Corporation \2\
ARI (Automotive Resources International)
Avis Rent-A-Car, Inc.

[[Page 42508]]

Budget Rent-A-Car Corporation
Dollar Rent-A-Car Systems, Inc.
Donlen Corporation
Enterprise Rent-A-Car
Enterprise Fleet Services \1\
GE Capital Fleet Services
Hertz Rent-A-Car Division (subsidiary of The Hertz Corporation)
Lease Plan USA, Inc.
PHH Vehicle Management Services/PHH Arval
U-Haul International, Inc. (Subsidiary of AMERCO)
Wheels Inc.

    \1\ Indicates a newly listed company, which must file a report 
beginning with the report due October 25, 2005.
    \2\ National Car Rental System, Inc., and Alamo Rent-A-Car Inc., 
became ANC Rental Corporation in 2002.

    Issued on: July 13, 2005.
Stephen R. Kratzke,
Associate Administrator for Rulemaking.
[FR Doc. 05-14139 Filed 7-22-05; 8:45 am]
BILLING CODE 4910-59-P