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Truck Renting and Leasing Association

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TRALA Applauds FMCSA Withdrawing from Insurance Minimum ANPRM

On June 2, 2017 the Federal Motor Carrier Safety Administration (FMCSA) agreed with TRALA and hundreds of trucking companies when it withdrew its November 28, 2014 advance notice of proposed rulemaking (ANPRM) concerning financial responsibility for motor carriers, freight forwarders, and brokers. FMCSA is authorized to establish minimum levels set by Congress. In the ANPRM, FMCSA sought public comment on whether to exercise its discretion to increase the minimum levels of financial responsibility, and, if so, to what levels. After reviewing all public comments to the ANPRM, FMCSA has determined that it had insufficient data or information to support moving forward with a rulemaking proposal at this time.
 

On June 2, 2017 the Federal Motor Carrier Safety Administration (FMCSA) agreed with TRALA and hundreds of trucking companies when it withdrew its November 28, 2014 advance notice of proposed rulemaking (ANPRM) concerning financial responsibility for motor carriers, freight forwarders, and brokers. FMCSA is authorized to establish minimum levels set by Congress. In the ANPRM, FMCSA sought public comment on whether to exercise its discretion to increase the minimum levels of financial responsibility, and, if so, to what levels. After reviewing all public comments to the ANPRM, FMCSA has determined that it had insufficient data or information to support moving forward with a rulemaking proposal at this time.
 
FMCSA received over 2000 comments but as aforementioned, didn't have enough data. FMCSA couldn't determine potential premium increases associated with increased financial limits. They also couldn't determine what the impact of having increased insurance minimums would have on insurance company capital requirements to ensure sufficient reserves to minimalize risk of insolvency and protect customers. Lastly, FMCSA couldn't calculate the economic benefits from having more financial resources available to assist crash victims associated with increased minimum financial responsibility limits.
 
TRALA met directly with FMCSA on two occasions - once in the summer and once in the fall of 2014 - regarding the potential new mandate that was expected to increase the minimum insurance required for not only for-hire motor carriers but to likely broaden the program to apply it to private carriers for the first time.
 
TRALA was concerned that the FMCSA rulemaking could require its members to obtain new insurance policies (simply because they are registered as private motor carriers) to comply with the new federal limit even though renting and leasing company employees are seldom the operators of their own vehicles. Operators of commercially leased and rented trucks are contractually required to provide insurance coverage as part of their motor carrier safety responsibilities. TRALA proactively pushed to avoid a situation in which both TRALA members and their customers would be required to purchase costly insurance policies for the same vehicles.
 
At the time, FMCSA officials stated they could not commit to any particular course of action to address the situation TRALA described though they did agree that they had not considered the unique nature of the leased and rented industry. TRALA discussed industry insurance practices with its membership in order to gather as much background information as possible in order to help FMCSA understand that renting and leasing companies already have more than enough insurance coverage to protect their trucks and the public for the small amount of time they were to move their vehicles between facilities.
 
While no one at FMCSA had set a likely increase level, there were many in the industry suggesting it would have doubled or tripled and if TRALA members had been forced to purchase that level of insurance while having their customers do the same, it could have had a significant financial impact on the renting and leasing industry.
 
If you have any questions regarding FMCSA withdrawing from this ANPRM, please contact Graham Hall at ghall@trala.org or at 703-299-9120.

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