Amended in Senate June 19, 2014

Amended in Assembly May 15, 2014

Amended in Assembly April 10, 2014

Amended in Assembly March 28, 2014

California Legislature—2013–14 Regular Session

Assembly BillNo. 2293


Introduced by Assembly Member Bonilla

February 21, 2014


An act to addbegin delete Chapter 8.5end deletebegin insert Article 7end insert (commencing with Section 5430) tobegin insert Chapter 8 ofend insert Division 2 of the Public Utilities Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

AB 2293, as amended, Bonilla. Transportation network companies: insurance coverage.

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Under existing

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begin insertExistingend insert law, the Passenger Charter-party Carriers’ Act,begin delete the Public Utilities Commission has adopted rules and regulations relating to public safety risks in the operation of transportation services utilizing transportation network companies. Those regulations define a transportation network company as an organization operating in California that provides prearranged transportation services for compensation using an online-enabled platform to connect passengers with drivers using their personal vehicles. Existing regulations of the commission require, among other things, a transportation network company to acquire a commercial liability policy for incidents involving transportation network company vehicles and drivers in transit to or during a transportation network company trip.end deletebegin insert provides for the regulation of charter-party carriers of passengers by the Public Utilities Commission, and makes it unlawful for a charter-party carrier to operate without first obtaining a permit or certificate, from the commission, except as specified. The act requires a charter-party carrier to, among other things, comply with specified vehicle identification and accident liability protection requirements. A violation of the act is generally a misdemeanor, punishable by a specified fine or term of imprisonment, or both, depending on the violation.end insert

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This bill would similarly define “transportation network company” and would require a transportation network company to disclose in writing to participating drivers, as part of its agreement with those drivers, the insurance coverage and limits of liability provided by the transportation network company and to advise a participating driver in writing that the driver’s personal automobile insurance policy may not provide coverage while the driver makes himself or herself available for transportation network company services.

end delete
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The bill would require a transportation network company’s insurance policy to apply, as the primary coverage, in the event of a loss or injury when a participating driver is logged on to the transportation network company’s application program.

end delete
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The bill would also require the transportation network company’s insurance company to defend and indemnify the participating driver and the person to whom the personal motor vehicle is registered in a civil action for a loss or injury that occurs when the personal motor vehicle is made available for transportation network services.

end delete
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This bill would impose specified requirements relating to insurance coverage, indemnity, and liability on transportation network companies, as defined, including requiring a transportation network company to disclose to participating drivers the company’s insurance coverage and limits of liability. The bill would specify that the transportation network company’s insurance is primary, and would impose a duty to defend and indemnify on the transportation network company. The bill would require the commission and the Department of Insurance to collaborate on a study of transportation network company insurance, as specified, and would prohibit a transportation network company from disclosing the personally identifiable information of a passenger, except as specified. The bill would specify the Legislature’s intent relating to expediting the approval of transportation network company insurance products, and would set forth related legislative findings and declarations.

end insert
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Because a violation of the bill’s provisions would be a crime, the bill would impose a state-mandated local program.

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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert
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This bill would provide that no reimbursement is required by this act for a specified reason.

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Vote: majority. Appropriation: no. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: begin deleteno end deletebegin insertyesend insert.

The people of the State of California do enact as follows:

begin delete
P3    1

SECTION 1.  

Chapter 8.5 (commencing with Section 5430) is
2added to Division 2 of the Public Utilities Code, to read:

3 

4Chapter  8.5. Transportation Network Companies
5

 

end delete
6begin insert

begin insertSECTION 1.end insert  

end insert

begin insertArticle 7 (commencing with Section 5430) is
7added to Chapter 8 of Division 2 of the end insert
begin insertPublic Utilities Codeend insertbegin insert, to
8read:end insert

9 

begin insert
10Article begin insert7.end insert  begin insertTransportation Network Companiesend insert
end insert
11

 

begin insert
12

begin insert5430.end insert  

Notwithstanding any other provision of this chapter, this
13article shall apply to transportation network companies.

end insert
14

begin delete5430.end delete
15begin insert5431.end insert  

As used in this chapter, a “transportation network
16company” is an organization, including, but not limited to, a
17corporation, partnership, or sole proprietor, operating in California
18that provides prearranged transportation services for compensation
19using an online-enabled application or platform to connect
20passengers with drivers using their personal vehicles.

begin delete
21

5431.  

(1) 

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22begin insert

begin insert5432.end insert  

end insert

A transportation network company shall disclose in
23writing to participating drivers, as part of its agreement with those
24drivers, the insurance coverage and limits of liability that the
25transportation network company provides while a driver makes
P4    1himself or herself available for transportation network company
2services, and shall advise a participating driver in writing that the
3driver’s personal automobile insurance policy may not provide
4coverage while the driver makes himself or herself available for
5transportation network company services.

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6(2) A transportation network company’s insurance policy is the
7primary policy coverage. If an applicable personal automobile
8insurance policy exists, the coverage of that policy is excess.

end delete
begin delete
9

5432.  

For purposes of determining insurance coverage, a
10transportation network company’s insurance policy shall apply in
11the event of a loss or injury when a participating driver logs on to
12the transportation network company’s application program.
13Coverage under the transportation network company’s insurance
14policy ceases when the driver logs off from the transportation
15network company’s application program.

end delete
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16

5433.  

If a participating driver or the person to whom the
17personal motor vehicle is registered is named a party in a civil
18action for a loss or injury that occurs during any time period when
19the personal motor vehicle is made available for transportation
20network services, the transportation network company’s insurance
21company shall have the duty to defend and indemnify the
22participating driver and the person to whom the personal motor
23vehicle is registered.

end delete
begin insert
24

begin insert5433.end insert  

(a) Regarding insurance, both of the following shall
25apply from the moment a participating driver logs on to the
26transportation network company’s application program until the
27driver logs off from that application program:

28(1) Transportation network company insurance shall be primary.

29(2) Transportation network company insurance shall have the
30duty to defend and indemnify.

31(b) Transportation network company liability insurance
32coverage shall be required at a lower amount from the moment a
33participating driver logs on to the transportation network company
34application program until that driver has a passenger match
35 accepted. This lower amount shall be at least fifty thousand dollars
36($50,000) for death and personal injury, at least one hundred
37thousand dollars ($100,000) for death and personal injury of two
38or more persons, and at least thirty thousand dollars ($30,000)
39for property damage, all per incident. The requirements for this
40coverage may be satisfied by any of the following:

P5    1(1) A primary personal automobile liability insurance policy
2that recognizes the driver’s provision of transportation network
3company services.

4(2) An automobile liability insurance policy maintained by the
5transportation network company that provides primary coverage
6in the event a driver’s personal automobile insurance policy does
7not recognize the driver’s provision of transportation network
8company services.

9(3) A combination of a primary automobile liability insurance
10policy that recognizes the driver’s provision of transportation
11network company services and an automobile liability insurance
12policy maintained by the transportation network company.

13(c) This section shall not limit the liability of a transportation
14network company arising out of an automobile accident involving
15a participating driver in any action for damages against a
16transportation network company for an amount above the required
17insurance coverage.

end insert
begin insert
18

begin insert5434.end insert  

The commission and the Department of Insurance shall
19collaborate on a study of transportation network company
20insurance to assess whether coverage requirements are appropriate
21to the risk of transportation network company services in order to
22promote data-driven decisions on insurance requirements.

end insert
begin insert
23

begin insert5435.end insert  

A transportation network company shall not disclose to
24a third party any personally identifiable information of a
25transportation network company passenger unless one of the
26following apply:

27(1) The customer knowingly consents.

28(2) Pursuant to a legal obligation.

29(3) The disclosure is to the commission in order to investigate
30a complaint filed with the commission against a transportation
31network company or a participating driver and the commission
32treats the information under confidentiality protections.

end insert
begin insert
33

begin insert5436.end insert  

It is the intent of the Legislature that the Department of
34Insurance expedite review of any application for approval of
35transportation network company insurance products.

end insert
begin insert
36

begin insert5437.end insert  

The Legislature makes the following findings:

37(a) The commission has initiated regulation of transportation
38network companies as a new category of charter-party carriers
39and continues to develop appropriate regulations for this new
40service.

P6    1(b) Given the rapidly evolving transportation network company
2service, it is the intent of the Legislature to continue ongoing
3oversight of the commission’s regulation of these services in order
4to enact legislation to adjust commission authority and impose
5specific requirements or prohibitions as deemed necessary as these
6services evolve.

end insert
7

begin delete5434.end delete
8begin insert5438.end insert  

Notwithstanding Section 11580.9 of the Insurance Code,
9or any other law affecting whether one or more policies of
10insurance that may apply with respect to an occurrence is primary
11or excess, thisbegin delete chapterend deletebegin insert articleend insert determines the obligations under
12insurance policies issued to transportation network companies and,
13if applicable, drivers providing transportation network services
14for transportation network companies.

15begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

No reimbursement is required by this act pursuant to
16Section 6 of Article XIII B of the California Constitution because
17the only costs that may be incurred by a local agency or school
18district will be incurred because this act creates a new crime or
19infraction, eliminates a crime or infraction, or changes the penalty
20for a crime or infraction, within the meaning of Section 17556 of
21the Government Code, or changes the definition of a crime within
22the meaning of Section 6 of Article XIII B of the California
23Constitution.

end insert


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