FMCSA Withdraws Rulemaking for Increase Minimum Insurance Requirements: Federal Motor Carrier Safety Administration
The Federal Motor Carrier Safety Administration (FMCSA) has withdrawn its November 28, 2014 advance notice of proposed rulemaking (ANPRM) increasing financial responsibility for motor carriers, freight forwarders, and brokers. FMCSA is authorized to establish minimum levels of financial responsibility for motor carriers at or above the minimum levels set by Congress.
The 2014 ANPRM arose from a study ordered by Congress in response to the increasing costs of truck-related crashes. In April of 2014, FMCSA reported to Congress that current financial responsibility minimums for the commercial motor vehicle industry were inadequate to meet the costs of some crashes. Congress considered raising the insurance minimum for general freight from $750,000 to $1 million, but decided to have FMCSA prepare an analysis that could become the basis for changes in the standard. The last minimum adjustment was in 1985, which set the current standard of $750,000 for general freight, $5 million for the most dangerous hazmat freight and $1 million for other hazmat freight.
In the 2014 ANPRM, the agency announced that it was considering a rulemaking that would increase minimum levels of motor carrier financial responsibility for bodily injury or property damage and sought information in connection with that potential rulemaking. In addition, the agency asked several questions related to broker/freight forwarder financial responsibility as it continues to implement Section 32918 of the Moving Ahead for Progress in the 21st Century Act. Finally, the agency asked a series of questions in the ANPRM pertaining to (1) trip insurance for Mexican carriers, (2) the discretionary imposition of financial responsibility requirements for motor passenger carrier brokers pursuant to 49 U.S.C. 13904(f), and (3) its self-insurance program for motor carriers.
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 determined that it has insufficient data or information to support moving forward with a rulemaking proposal.
A total of 2,181 public comments were received by motor carriers, insurance companies, broker/freight forwarders, safety advocates, attorneys, drivers, and others. However, FMCSA stated that commenters “did not provide responsive information necessary to allow the agency to proceed to a Notice of Proposed Rulemaking.” One stumbling block to advancing the ANPRM is that certain data on truck crashes can only be supplied by insurance carriers. And the agency cannot compel them to provide that proprietary information.
In withdrawing the ANPRM, FMCSA stated that based on the information provided, FMCSA is not able to determine (1) potential increases in insurance premiums associated with increased financial responsibility limits, or (2) or the impact of an increase in minimum financial responsibility requirements on insurance company capital requirements set by insurance regulators to ensure there are sufficient reserves to minimize the risk of insolvency and protect consumers. Moreover, FMCSA is not able to calculate economic benefits from having more financial resources available to assist crash victims associated with increased minimum financial responsibility limits.
Sadly, these are thinly veiled excuses that reflect the current administration’s “profits over people” policies, which will deprive innocent victims of truck crashes from receiving a full measure of justice. It is equally troubling that the taxpayers, and not the trucking companies that enjoy the privilege of operating on our roadways and making significant profits, will be forced to pay for the expenses from serious crashes where the minimum insurance requirements are insufficient to cover the damages.