Insurer Reporting Requirements; List of Insurers Required To File Reports, 1548-1551 [2010-268]

Agencies

• National Highway Traffic Safety Administration
• DEPARTMENT OF TRANSPORTATION

[Federal Register Volume 75, Number 7 (Tuesday, January 12, 2010)]
[Rules and Regulations]
[Pages 1548-1551]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-268]


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DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety Administration

49 CFR Part 544

[Docket No.: NHTSA-2009-0050]
RIN 2127-AK46


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 the Insurer Reporting Requirements. The 
regulations specify the requirements for annual insurer reports and 
lists in appendices 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 2006 calendar year before October 25, 2009 as 
specified by law, but we acknowledge this notice has not been published 
by that date. Therefore, NHTSA will not take enforcement actions 
against any insurer that file the 2006 insurer reports after October 
25, 2009, but not later than December 31, 2009. This is a one-time 
exception, based on the unique circumstances for 2009. All subsequent 
reports must be filed not later than October 25th of the year in which 
the reports are due. If the passenger motor vehicle insurers remain 
listed, they must submit reports by each subsequent October 25th.

DATES: This final rule becomes effective on February 11, 2010. Insurers 
listed in the appendices were required to submit reports on or before 
December 31, 2009. If you wish to submit a petition for reconsideration 
of this rule, your petition must be received by February 26, 2010.

ADDRESSES: Petitions for reconsideration should refer to the docket 
number and be submitted to: Administrator, National Highway Traffic 
Safety Administration, 1200 New Jersey Avenue, SE., West Building, Room 
W41-307, Washington, DC 20590.

FOR FURTHER INFORMATION CONTACT: Carlita Ballard, Office of 
International Policy, Fuel Economy and Consumer Programs, NHTSA, 1200 
New Jersey Avenue, SE., West Building, Room W43-439, Washington, DC 
20590, by electronic mail to carlita.ballard@dot.gov. Ms. Ballard's 
telephone number is (202) 366-0846. Her fax number is (202) 493-2990.

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. Pursuant to 49 U.S.C. 
Section 33112(f), 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 (49 
CFR Part 544; 52 FR 59, January 2, 1987), 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;
    (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

[[Page 1549]]

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 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, 2009, 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 August 17, 2009, NHTSA published a notice of proposed rulemaking 
(NPRM) to update the list of insurers in Appendices A, B, and C 
required to file reports (74 FR 41362). 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 August 18, 2008 (73 FR 48151). Based on the 2006 calendar 
year market share data from A.M. Best, NHTSA proposed to remove Auto 
Club Southern California Group and add Auto Club Enterprise Insurance 
Group to Appendix A.
    Appendix B lists insurers required to report because each insurer 
had a 10 percent or greater market share of motor vehicle premiums in a 
particular State. Based on the 2006 calendar year data for market 
shares from A.M. Best, we proposed to remove Farm Bureau of Idaho from 
Appendix B.

2. Rental and Leasing Companies

    Appendix C lists rental and leasing companies required to file 
reports. Subsequent to publishing the August 18, 2008 final rule (see 
73 FR 48151), the agency was informed by Emkay, Inc., (Emkay) that it 
was a motor vehicle leasing company offering financial, fleet 
management and consulting services pertaining to operating a fleet of 
motor vehicles and does not provide insurance policies for its 
customers to purchase. However, Emkay, further stated that it does 
include as a condition of its lease agreement that its lessees purchase 
and maintain its own motor vehicle insurance coverage. Emkay also 
submitted a copy of its lease agreement showing that insurance was 
required as a condition of the lease. Therefore, NHTSA proposed to 
remove Emkay, Inc. from the list of insurers required to meet the 
reporting requirements.

Public Comments on Final Determination

Insurers of Passenger Motor Vehicles

    The agency received no comments in response to the NPRM. Therefore, 
this final rule adopts the proposed changes to Appendix A, B and C. 
Accordingly, NHTSA has determined that each of the 19 insurers listed 
in Appendix A, each of the eight insurers listed in Appendix B and each 
of six companies listed in Appendix C are required to submit an insurer 
report on its experience for calendar year 2006 no later than December 
31, 2009, and set forth the information required by Part 544. As long 
as these insurers and companies remain listed, they would be required 
to submit reports in subsequent years.

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: Carlita Ballard, Office of International Policy, Fuel 
Economy and Consumer Programs, Department of Transportation, NHTSA, 
West Building, 1200 New Jersey Avenue, SE., NVS-131, Room W43-439, 
Washington, DC 20590;
    b. E-mail: carlita.ballard@dot.gov; or
    c. Fax: (202) 493-2990.
    Theft loss reports may also be submitted to the docket 
electronically [identified by Docket No. NHTSA-2009-0050] by:
    d. Logging onto the Federal eRulemaking Portal: Go to https://www.regulations.gov. Follow the online 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 
final rule and determined that the action is not ``significant'' within 
the meaning of the Department of Transportation's regulatory policies 
and procedures. This final 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 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 2006 (see https://www.bls.gov/cpi), 
the cost estimates in the 1987 final regulatory evaluation were 
adjusted for inflation. The agency estimates that the cost of 
compliance is $107,650 for any insurer added to Appendix A, $43,060 for 
any insurer added to Appendix B, and $12,423 for any insurer added to 
Appendix C. This final rule will remove one company and add one company 
to Appendix A, remove one company for Appendix B, and remove one 
company from appendix C. Therefore, the net effect of this final rule 
is a decreased cost of $55,483 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, Technical Reference Division, 1200 New Jersey Avenue, 
SE., East Building (Ground Floor), Room E12-100, Washington, DC 20590, 
or by calling (202) 366-2588.

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.). The existing information collection indicates that the 
number of respondents for this collection is thirty-three, however, the 
actual number of respondents fluctuate from year to year.

[[Page 1550]]

Therefore, because the number of respondents required to report for 
this final rule does not exceed the number of respondents indicated in 
the existing information collection, the agency does not believe that 
an amendment to the existing information collection is necessary. This 
collection of information is assigned OMB Control Number 2127-0547 
(``Insurer Reporting Requirements'').

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 final 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 listed on 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 exempts 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 exempts 
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, 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:
    [ballot] Have we organized the material to suit the public's needs?
    [ballot] Are the requirements in the proposal clearly stated?
    [ballot] Does the proposal contain technical language or jargon 
that is not clear?
    [ballot] Would a different format (grouping and order of sections, 
use of headings, paragraphing) make the rule easier to understand?
    [ballot] Would more (but shorter) sections be better?
    [ballot] Could we improve clarity by adding tables, lists, or 
diagrams?
    [ballot] 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: Carlita Ballard, Office of International Policy, Fuel 
Economy and Consumer Programs, NHTSA, West Building, 1200 New Jersey 
Avenue, SE., NVS-131, Room W43-439, Washington, DC 20590.
    b. E-mail: carlita.ballard@dot.gov; or Fax: (202) 493-2990.

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. In Sec.  544.5, paragraph (a), the second sentence is revised to 
read as follows:


Sec.  544.5  General requirements for reports.

    (a) * * * 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 December 31, 
2009 will contain the required information for the 2006 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 Club Enterprise Insurance Group \1\
Auto-Owners Insurance Group
Erie Insurance Group
Berkshire Hathaway/GEICO Corporation Group
California State Auto Group \1\
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    \1\ Indicates a newly listed company which must file a report 
beginning with the report due December 31, 2009.
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Hartford Insurance Group
Liberty Mutual Insurance Companies
Metropolitan Life Auto & Home Group
Mercury General Group
Nationwide Group
Progressive Group
Safeco Insurance Companies
State Farm Group
Travelers Companies
USAA Group
Farmers Insurance Group


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)
Auto Club (Michigan)
Commerce Group, Inc. (Massachusetts)
Kentucky Farm Bureau Group (Kentucky)
New Jersey Manufacturers Group (New Jersey)
Safety Group (Massachusetts)
Southern Farm Bureau Group (Arkansas, Mississippi)
Tennessee Farmers Companies (Tennessee)

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

Cendant Car Rental
Dollar Thrifty Automotive Group
Enterprise Rent-A-Car
Hertz Rent-A-Car Division (subsidiary of The Hertz Corporation)
U-Haul International, Inc. (Subsidiary of AMERCO)
Vanguard Car Rental USA


[[Page 1551]]


    Issued on: January 5, 2010.
Stephen R. Kratzke,
Associate Administrator for Rulemaking.
[FR Doc. 2010-268 Filed 1-11-10; 8:45 am]
BILLING CODE 4910-59-P