Federal Register / Vol. 71, No. 171 / Tuesday, September 5, 2006 / Rules and Regulations 52291

DEPARTMENT OF TRANSPORTATION percent or more of total premiums each spring. The agency uses the data to written within any one state; and determine the insurers’ market shares National Highway Traffic Safety (3) Rental and leasing companies with nationally and in each state. Administration a fleet of 20 or more vehicles not covered by theft insurance policies B. Self-Insured Rental and Leasing 49 CFR Part 544 issued by insurers of motor vehicles, Companies other than any governmental entity. In addition, upon making certain [Docket No.: NHTSA–2006–24175] Pursuant to its statutory exemption determinations, NHTSA grants RIN 2127–AJ88 authority, the agency exempted certain exemptions to self-insurers, i.e., any passenger motor vehicle insurers from person who has a fleet of 20 or more Insurer Reporting Requirements; List the reporting requirements. motor vehicles (other than any of Insurers Required To File Reports governmental entity) used for rental or A. Small Insurers of Passenger Motor lease whose vehicles are not covered by AGENCY: National Highway Traffic Vehicles theft insurance policies issued by Safety Administration (NHTSA), Section 33112(f)(2) provides that the Department of Transportation (DOT). insurers of passenger motor vehicles, 49 agency shall exempt small insurers of U.S.C. 33112(b)(1) and (f). Under 49 ACTION: Final rule. passenger motor vehicles if NHTSA U.S.C. 33112(e)(1) and (2), NHTSA may SUMMARY: This final rule amends finds that such exemptions will not exempt a self-insurer from reporting, if regulations on insurer reporting significantly affect the validity or the agency determines: requirements. The appendices list those usefulness of the information in the (1) The cost of preparing and passenger motor vehicle insurers that reports, either nationally or on a state- furnishing such reports is excessive in are required to file reports on their by-state basis. The term ‘‘small insurer’’ relation to the size of the business of the motor vehicle theft loss experiences. An is defined, in Section 33112(f)(1)(A) and insurer; and 33112(e)(1) and (2), (2) The insurer’s report will not insurer included in any of these (B), as an insurer whose premiums for significantly contribute to carrying out appendices must file three copies of its motor vehicle insurance issued directly the purposes of Chapter 331. report for the 2003 calendar year before or through an affiliate, including pooling arrangements established under In a final rule published June 22, 1990 October 25, 2006. If the passenger motor (55 FR 25606), the agency granted a vehicle insurers remain listed, they state law or regulation for the issuance of motor vehicle insurance, account for class exemption to all companies that must submit reports by each subsequent rent or lease fewer than 50,000 vehicles, October 25. less than 1 percent of the total premiums for all forms of motor vehicle because it believed that the largest DATES: This final rule becomes effective insurance issued by insurers within the companies’ reports sufficiently on November 6, 2006. Insurers listed in United States. However, that section represent the theft experience of rental the appendices are required to submit also stipulates that if an insurance and leasing companies. NHTSA reports before October 25, 2006. company satisfies this definition of a concluded that smaller rental and FOR FURTHER INFORMATION CONTACT: ‘‘small insurer,’’ but accounts for 10 leasing companies’ reports do not Rosalind Proctor, Office of International percent or more of the total premiums significantly contribute to carrying out Vehicle, Fuel Economy and Consumer for all motor vehicle insurance issued in NHTSA’s statutory obligations and that Standards, NHTSA, 400 Seventh Street, a particular state, the insurer must exempting such companies will relieve SW., Washington, DC 20590, by report about its operations in that state. an unnecessary burden on them. As a electronic mail to In the final rule establishing the result of the June 1990 final rule, the [email protected]. Ms. Proctor’s insurer reports requirement (52 FR 59; agency added Appendix C, consisting of telephone number is (202) 366–0846. January 2, 1987), 49 CFR part 544, an annually updated list of the self- Her fax number is (202) 493–2290. NHTSA exercised its exemption insurers subject to part 544. Following SUPPLEMENTARY INFORMATION: authority by listing in Appendix A each the same approach as in Appendix A, NHTSA included, in Appendix C, each I. Background insurer that must report because it had at least 1 percent of the motor vehicle of the self-insurers subject to reporting Pursuant to 49 U.S.C. 33112, Insurer insurance premiums nationally. Listing instead of the self-insurers which are reports and information, NHTSA the insurers subject to reporting, instead exempted. NHTSA updates Appendix C requires certain passenger motor vehicle of each insurer exempted from reporting based primarily on information from insurers to file an annual report with the because it had less than 1 percent of the Automotive Fleet Magazine and Auto agency. Each insurer’s report includes premiums nationally, is Rental News.2 information about thefts and recoveries administratively simpler since the of motor vehicles, the rating rules used C. When a Listed Insurer Must File a former group is much smaller than the Report by the insurer to establish premiums for latter. In Appendix B, NHTSA lists comprehensive coverage, the actions those insurers required to report for Under part 544, as long as an insurer taken by the insurer to reduce such particular states because each insurer is listed, it must file reports on or before premiums, and the actions taken by the had a 10 percent or greater market share October 25 of each year. Thus, any insurer to reduce or deter theft. of motor vehicle premiums in those insurer listed in the appendices must Pursuant to 49 U.S.C. Section 33112(f), states. In the January 1987 final rule, the file a report before October 25, and by the following insurers are subject to the agency stated that it would update each succeeding October 25, absent an reporting requirements: Appendices A and B annually. NHTSA amendment removing the insurer’s (1) Issuers of motor vehicle insurance updates the appendices based on data name from the appendices. policies whose total premiums account voluntarily provided by insurance for 1 percent or more of the total U.S.C. 33112(i) authorizes NHTSA to consult with companies to A.M. Best, which A.M. public and private organizations as necessary. premiums of motor vehicle insurance 1 Best publishes in its State/Line Report 2 Automotive Fleet Magazine and Auto Rental issued within the United States; News are publications that provide information on (2) Issuers of motor vehicle insurance 1 A.M. Best Company is a well-recognized source the size of fleets and market share of rental and policies whose premiums account for 10 of insurance company ratings and information. 49 leasing companies.

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II. Notice of Proposed Rulemaking Vanguard USA.5 Each of the insurer to include ‘‘a person (except a 13 companies (including franchisees governmental authority) having a fleet 1. Insurers of Passenger Motor Vehicles and licensees) listed in Appendix C are of at least 20 motor vehicles that are On April 3, 2006, NHTSA published required to file reports for calendar year used primarily for rental or lease and a notice of proposed rulemaking 2003 no later than October 25, 2006, and that are not covered by a theft insurance (NPRM) to update the list of insurers in set forth the information required by policy issued by an insurer of passenger Appendices A, B, and, C required to file part 544. As long as those 13 companies motor vehicles’’.6 reports (71 FR 16541). Appendix A lists remain listed, they would be required to Since all of these companies either insurers that must report because each submit reports before each subsequent require its lessees to provide the had 1 percent of the motor vehicle October 25 for the calendar year ending insurance for its vehicles, or do not self- insurance premiums on a national basis. slightly less than 3 years before. insure 50,000 or more vehicles in its The list was last amended in a final rule leasing fleet, none of them meet the published on July 25, 2005 (70 FR Public Comments on Final criteria the agency uses to determine 42505). Based on the 2003 calendar year Determination that an insurer should be included in market share data from A.M. Best, Insurers of Passenger Motor Vehicles Appendix C. Therefore, the agency NHTSA proposed to remove determines that each of these six In response to the NPRM, the agency State Auto Association from Appendix companies should be removed from received one formal comment. In a letter A. Appendix C in the final rule. Each of the 18 insurers listed in dated April 27, 2006, Automotive The agency received no comments in Appendix A are required to file a report Resources International/Automotive response to the NPRM for Appendices A before October 25, 2006, setting forth Rentals, Inc. (ARI), requested the agency and B. Accordingly, this final rule the information required by Part 544 for to remove its name from the list of adopts the proposed changes to each State in which it did business in insurers required to meet the insurer Appendix A and B. the 2003 calendar year. As long as these reporting requirements. ARI informed After reviewing the public comments 18 insurers remain listed, they are the agency that it is not an insurer and and making the appropriate adjustment required to submit a report by each does not allow self-insurance. ARI to Appendix C, NHTSA has determined subsequent October 25 for the calendar explained that it is a national long-term that each of the 18 insurers listed in year ending slightly less than 3 years corporate fleet lessor/fleet management Appendix A, each of the nine insurers before. company, not affiliated in any way with listed in Appendix B and each of 7 Appendix B lists insurers required to an insurance company or carrier, and companies listed in Appendix C are report for particular States for calendar that its lessees are responsible for all required to submit an insurer report on year 2003, because each insurer had a insurance coverages on their leased its experience for calendar year 2003 as 10 percent or greater market share of vehicles. ARI further explained that required by 49 CFR part 544. motor vehicle premiums in those States. while it is named as an additional Based on the 2003 calendar year data for insured/interest on its lessee’s insurance Submission of Theft Loss Report market shares from A.M. Best, we policies, it does not keep records of Passenger motor vehicle insurers proposed to remove Nodak Mutual these policies or become involved in listed in the appendices can forward Group (North Dakota) and add Safety theft claims because they are handled their theft loss reports to the agency in Group (Massachusetts) to Appendix B. through the lessee’s insurance company. several ways: The nine insurers listed in Appendix Subsequent to the comment closing a. Mail: Rosalind Proctor, Office of B are required to report on their period, the agency was informed by five International Policy, Fuel Economy and calendar year 2003 activities in every additional companies, the Donlen Consumer Standards, NHTSA, NVS– State where they had a 10 percent or Corporation, GE Capital Fleet Services/ 131, 400 Seventh Street, SW., greater market share. These reports must GE Fleet Services, Lease Plan USA, Inc., Washington, DC 20590; be filed by October 25, 2006, and set PHH Vehicle Management Services/ b. E-Mail: [email protected]; forth the information required by part PHH Arval, and Wheels, Inc. that when or 544. As long as these nine insurers they offer vehicles for lease, they also c. Fax: (202) 493–2290. remain listed, they would be required to include as a condition of the lease Theft loss reports may also be submit reports on or before each agreement that the lessor provide its submitted to the docket electronically subsequent October 25 for the calendar own motor vehicle insurance. by: year ending slightly less than 3 years Specifically, four of the five companies d. Logging onto the Dockets before. (, GE Capital Fleet Management System Web site at http:// dms.dot.gov. Click on ‘‘ES Submit’’ or 2. Rental and Leasing Companies Services/GE Fleet Services, Lease Plan USA, Inc., and Wheels, Inc.,) reported ‘‘Help’’ to obtain instructions for filing Appendix C lists rental and leasing that they do not self-insure any of their the document electronically. companies required to file reports. vehicles. At NHTSA’s request these Regulatory Impacts Based on information in Automotive companies submitted copies of their Fleet Magazine and Auto Rental News lease agreements showing that 1. Costs and Other Impacts for 2003, NHTSA proposed to remove insurance was required as a condition of This notice has not been reviewed Avis Rent-A-Car, Budget Rent-A-Car the lease. One company, PHH Vehicle under Executive Order 12866, Corporation, Dollar Rent-A-Car Systems, Management Services/PHH Arval, Regulatory Planning and Review. Inc. and ANC Rental Corporation and reported that it does allow self- NHTSA has considered the impact of add the Cendant Car Rental Group,3 insurance but self-insures fewer than this final rule and determined that the Dollar Thrifty Automotive Group 4 and 50,000 vehicles in its fleet. action is not ‘‘significant’’ within the Section 33112(b)(1) of Title 49 of the meaning of the Department of 3 Cendant Car Rental acquired ownership of Avis and Budget Rent-a-Car in 2002. United States Code (U.S.C.) defines an Transportation’s regulatory policies and 4 Dollar Thrifty Automotive Group acquired ownership of Dollar Rent-a-Car Systems, Inc. and 5 Vanguard Car Rental USA acquired ownership 6 As previously noted, NHTSA has by regulation Thrifty, Inc., in 2001. of ANC Rental Corporation in 2003. increased the exemption to 50,000 vehicles.

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procedures. This final rule implements a substantial number of small entities. 8. Plain Language the agency’s policy of ensuring that all The rationale for the certification is that Executive Order 12866 requires each insurance companies that are statutorily none of the companies listed on agency to write all rules in plain eligible for exemption from the insurer Appendices A, B, or C are construed to language. Application of the principles reporting requirements are in fact be a small entity within the definition of plain language includes consideration exempted from those requirements. of the RFA. ‘‘Small insurer’’ is defined, of the following questions: Only those companies that are not in part under 49 U.S.C. 33112, as any • Have we organized the material to statutorily eligible for an exemption are insurer whose premiums for all forms of suit the public’s needs? required to file reports. motor vehicle insurance account for less • Are the requirements in the NHTSA does not believe that this than 1 percent of the total premiums for proposal clearly stated? rule, reflecting current data, affects the all forms of motor vehicle insurance • Does the proposal contain technical impacts described in the final regulatory issued by insurers within the United language or jargon that is not clear? evaluation prepared for the final rule States, or any insurer whose premiums • Would a different format (grouping establishing part 544 (52 FR 59; January within any State, account for less than and order of sections, use of headings, 2, 1987). Accordingly, a separate 10 percent of the total premiums for all paragraphing) make the rule easier to regulatory evaluation has not been forms of motor vehicle insurance issued understand? prepared for this rulemaking action. by insurers within the State. This notice • Would more (but shorter) sections Using the Bureau of Labor Statistics exempts all insurers meeting those be better? Consumer Price Index for 2005 (see criteria. Any insurer too large to meet • Could we improve clarity by adding http://www.bls.gov/cpi), the cost those criteria is not a small entity. In tables, lists, or diagrams? estimates in the 1987 final regulatory addition, in this rulemaking, the agency • What else could we do to make the evaluation were adjusted for inflation. exempts all ‘‘self insured rental and proposal easier to understand? The agency estimates that the cost of leasing companies’’ that have fleets of If you have any responses to these compliance is $97,650 for any insurer fewer than 50,000 vehicles. Any self- questions, you can forward them to me added to Appendix A, $39,060 for any insured rental and leasing company too several ways: insurer added to Appendix B, and large to meet that criterion is not a small a. Mail: Rosalind Proctor, Office of $11,269 for any insurer added to entity. International Policy, Fuel Economy and Appendix C. In this final rule, the Consumer Standards, NHTSA, 400 4. Federalism agency made no additional changes to Seventh Street, SW., Washington, DC Appendices A and B, and includes six This action has been analyzed 20590; fewer companies in Appendix C, as according to the principles and criteria b. E-mail: [email protected]; compared to the last list of insurers contained in Executive Order 12612, or published in the April 3, 2006 NPRM. and it has been determined that the final c. Fax: (202) 493–2290. The agency estimates that the net effect rule does not have sufficient federalism of this final rule would be a cost savings implications to warrant the preparation List of Subjects in 49 CFR Part 544 of approximately $67,614 to insurers as of a Federalism Assessment. Crime insurance, Insurance, Insurance a group. companies, Motor vehicles, Reporting 5. Environmental Impacts Interested persons may wish to and recordkeeping requirements. examine the 1987 final regulatory In accordance with the National I In consideration of the foregoing, 49 evaluation. Copies of that evaluation Environmental Policy Act, NHTSA has CFR part 544 is amended as follows: were placed in Docket No. T86–01; considered the environmental impacts Notice 2. Any interested person may of this final rule and determined that it PART 544—[AMENDED] obtain a copy of this evaluation by would not have a significant impact on writing to NHTSA, Docket Section, the quality of the human environment. I 1. The authority citation for part 544 Room 5109, 400 Seventh Street, SW., continues to read as follows: 6. Civil Justice Reform Washington, DC 20590, or by calling Authority: 49 U.S.C. 33112; delegation of (202) 366–4949. This final rule does not have any authority at 49 CFR 1.50. retroactive effect, and it does not 2. Paperwork Reduction Act preempt any State law, 49 U.S.C. 33117 I 2. In § 544.5, paragraph (a), the second The information collection provides that judicial review of this rule sentence is revised to read as follows: requirements in this final rule were may be obtained pursuant to 49 U.S.C. § 544.5 General requirements for reports. submitted and approved by the Office of 32909, and section 32909 does not Management and Budget (OMB) require submission of a petition for (a) * * * This report shall contain pursuant to the requirements of the reconsideration or other administrative the information required by § 544.6 of Paperwork Reduction Act (44 U.S.C. proceedings before parties may file suit this part for the calendar year 3 years 3501 et seq.). This collection of in court. previous to the year in which the report information is assigned OMB Control is filed (e.g., the report due by October 7. Regulation Identifier Number (RIN) Number 2127–0547 (‘‘Insurer Reporting 25, 2006 will contain the required Requirements’’) and approved for use The Department of Transportation information for the 2003 calendar year). through August 31, 2009, and the assigns a regulation identifier number * * * * * agency will seek to extend the approval (RIN) to each regulatory action listed in I 3. Appendix A to part 544 is revised afterwards. the Unified Agenda of Federal to read as follows: Regulations. The Regulatory Information 3. Regulatory Flexibility Act Service Center publishes the Unified Appendix A—Insurers of Motor Vehicle The agency also considered the effects Agenda in April and October of each Insurance Policies Subject to the of this rulemaking under the Regulatory year. You may use the RIN contained in Reporting Requirements in Each State Flexibility Act (RFA) (5 U.S.C. 601 et the heading, at the beginning, of this in Which They Do Business seq.). I certify that this final rule will not document to find this action in the Allstate Insurance Group have a significant economic impact on Unified Agenda. American Family Insurance Group

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American International Group Appendix B—Issuers of Motor Vehicle Appendix C—Motor Vehicle Rental and Auto-Owners Insurance Group Insurance Policies Subject to the Leasing Companies (Including CNA Insurance Companies Reporting Requirements Only in Licensees and Franchisees) Subject to Erie Insurance Group Designated States the Reporting Requirements of Part 544 Berkshire Hathaway/GEICO Corporation Alfa Insurance Group (Alabama) Group Cendant Car Rental Arbella Mutual Insurance (Massachusetts) Dollar Thrifty Automotive Group Hartford Insurance Group Auto Club (Michigan) Enterprise Rent-A-Car Liberty Mutual Insurance Companies Commerce Group, Inc. (Massachusetts) Metropolitan Life Auto & Home Group Kentucky Farm Bureau Group (Kentucky) Enterprise Fleet Services Mercury General Group New Jersey Manufacturers Group (New Hertz Rent-A-Car Division (subsidiary of The Nationwide Group Jersey) Hertz Corporation) Progressive Group Safety Group (Massachusetts) 1 U-Haul International, Inc. (Subsidiary of Safeco Insurance Companies Southern Farm Bureau Group (Arkansas, AMERCO) State Farm Group Mississippi) Vanguard Car Rental USA Tennessee Farmers Companies (Tennessee) Travelers PC Group Issued on: August 29, 2006. I USAA Group 5. Appendix C to part 544 is revised Stephen R. Kratzke, Farmers Insurance Group to read as follows: Associate Administrator for Rulemaking. I 4. Appendix B to part 544 is revised 1 Indicates a newly listed company, which must [FR Doc. E6–14633 Filed 9–1–06; 8:45 am] to read as follows: file a report beginning with the report due October BILLING CODE 4910–59–P 25, 2006.

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