Amended in Senate July 2, 2014

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 add Article 7 (commencing with Section 5430) to Chapter 8 of Division 2 of the Public Utilities Code, relating to transportation.

LEGISLATIVE COUNSEL’S DIGEST

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

Existing law, the Passenger Charter-party Carriers’ Act, 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.

This bill wouldbegin delete 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 companyend deletebegin insert amend the Passenger Charter-party Carriers’ Act to enact specified requirements for liability and other insurance coverage for transportation network companies, as defined, and their participating drivers. The bill would define 3 distinct time periods that comprise transportation network company services, and would specify the insurance requirements for each of those time periods and alternative methods of compliance with those requirements. The bill would require a transportation network company to verify that a participating driver carries and maintains the appropriate type of insurance coverage, as applicable, and, in the event a driver’s insurance policy ceases to exist, would require the transportation network company’s insurance policy to provide the required coverage. The bill would require insurance coverage for transportation network company services to be specifically written to cover those services, and would provide that a participating driver’s personal automobile insurance policy does not provide coverage for those services unless that coverage is separately and specifically stated and pricedend insert. 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.

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

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.

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

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

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

P3    1

SECTION 1.  

Article 7 (commencing with Section 5430) is
2added to Chapter 8 of Division 2 of the Public Utilities Code, to
3read:

4 

5Article 7.  Transportation Network Companies
6

 

7

5430.  

Notwithstanding any other provision of this chapter, this
8article shall apply to transportation network companies.

9

5431.  

As used in thisbegin delete chapterend deletebegin insert articleend insert, a “transportation network
10company” is an organization, including, but not limited to, a
11corporation, partnership,begin delete orend delete sole proprietor,begin insert or any other entity,end insert
12 operating in California that provides prearranged transportation
13services for compensation using an online-enabled application or
14platform to connect passengers with drivers using their personal
15 vehicles.

begin insert
16

begin insert5432.end insert  

(a) As used in this article, “transportation network
17company services” refers to the period of time that commences
18when a participating driver in a transportation network company
19logs onto the transportation network company’s application
20program and ceases when the driver logs off the application
21program.

22(b) For purposes of this article, transportation network company
23services have three distinct time periods, as follows:

24(1) Period One runs from the time a participating driver logs
25onto the transportation network company’s application program
26and continues as long as the driver has not yet accepted a match
27with a passenger on the application program. Period One also
28runs from the time a matched passenger exits the private passenger
29vehicle of the participating driver until the time the driver accepts
30another match with a passenger or logs off the application
31program.

32(2) Period Two runs from the time a participating driver accepts
33a match with a passenger on the transportation network company’s
34application program until the time the driver picks up the matched
35passenger.

36(3) Period Three runs from the time a passenger enters the
37private passenger vehicle of the participating driver until the
38passenger exits the vehicle.

end insert
P4    1

begin delete5432.end delete
2begin insert5433.end insert  

begin insert(a)end insertbegin insertend insertA transportation network company shall disclose in
3writing to participating drivers, as part of its agreement with those
4drivers, the insurance coverage and limits of liability that the
5transportation network company provides while a driver makes
6himself or herself available for transportation network company
7services, and shall advise a participating driver in writing that the
8driver’s personal automobile insurance policy may not provide
9coverage while the driver makes himself or herself available for
10transportation network company services.

begin insert

11(b) (1) A transportation network company shall maintain
12insurance coverage that assumes all liability and provides other
13coverages for transportation network company services during
14Periods Two and Three, as described in subdivision (b) of Section
155432. The insurance limits and coverages shall include, but need
16not be limited to, the requirements imposed by the commission for
17transportation network companies relative to liability, medical
18payments, comprehensive, collision, and uninsured and
19underinsured motorist.

end insert
begin insert

20(2)  The requirement for a transportation network company to
21maintain insurance coverage pursuant to this subdivision may be
22satisfied by any of the following:

end insert
begin insert

23(A) An insurance policy obtained by a participating driver that
24is specifically written to cover transportation network company
25services during Periods Two and Three.

end insert
begin insert

26(B) Any combination of an insurance policy obtained by the
27transportation network company and an insurance policy obtained
28by a participating driver that is specifically written to cover
29transportation network company services, or portion thereof.

end insert
begin insert

30(C) An insurance policy obtained by a transportation network
31company.

end insert
begin insert

32(3) A transportation network company may meet its obligations
33to maintain insurance coverage under this subdivision with a policy
34obtained by the participating driver pursuant to subparagraph (A)
35of paragraph (2), or with a combination of policies pursuant to
36subparagraph (B) of paragraph (2), only if the transportation
37network company verifies that the policy or policies in question
38are specifically written to cover transportation network company
39services and that any policy obtained by a participating driver in
40that regard is maintained.

end insert
begin insert

P5    1(4) If an insurance policy obtained by a participating driver to
2meet the requirements of this subdivision ceases to exist at any
3time for any reason, including, but not limited to, lapse or
4cancellation, the transportation network company’s insurance
5policy shall provide all required coverage under this subdivision
6beginning with the first dollar of a claim.

end insert
begin insert

7(c) (1) A transportation network company shall ensure that a
8participating driver is covered by insurance coverage during
9Period One, including liability, medical payments, comprehensive,
10collision, and uninsured and underinsured motorist coverage, as
11required by the commission, subject to coverage requirements as
12specified in this subdivision, through one of the following:

end insert
begin insert

13(A) A policy obtained by a transportation network company
14with limits of liability coverage of seven hundred fifty thousand
15dollars ($750,000) for death, personal injury, and property
16damage, and with limits for other required coverages as determined
17by the commission.

end insert
begin insert

18(B) A policy obtained by a participating driver of a
19transportation network company that is specifically written to
20cover Period One with limits of liability coverage of seven hundred
21fifty thousand dollars ($750,000) for death, personal injury, and
22property damage, and with limits for other required coverages as
23determined by the commission.

end insert
begin insert

24(C) Any combination of policies obtained by a transportation
25network company and a participating driver, where each policy
26is specifically written to cover Period One, as long as the combined
27policies together provide liability coverage of seven hundred fifty
28thousand dollars ($750,000) for death, personal injury, and
29property damage, and with limits for other required coverages as
30determined by the commission.

end insert
begin insert

31(2) A transportation network company may meet its obligations
32under this subdivision through a policy obtained by a participating
33driver pursuant to subparagraph (B) or (C) of paragraph (1) only
34if the transportation network company verifies that the policy is
35specifically written to cover transportation network company
36services and is maintained by the driver.

end insert
begin insert

37(3) If an insurance policy obtained by a participating driver to
38meet the requirements of this subdivision pursuant to subparagraph
39(B) or (C) of paragraph (1) ceases to exist at any time for any
40reason, including, but not limited to, lapse or cancellation, the
P6    1transportation network company’s insurance policy shall provide
2all required coverage under this subdivision beginning with the
3first dollar of a claim.

end insert
begin insert

4(4) Notwithstanding any other law, in the event of a loss or
5injury during the provision of transportation network company
6services, where the loss or injury exceeds the policy coverage
7requirements of this subdivision, the transportation network
8company, or any affiliated parent or subsidiary of the
9transportation network company, shall assume all liability of the
10participating driver under this subdivision above the amounts of
11those policy coverage limits. This paragraph shall apply regardless
12of whether the affiliate is organized as a limited liability company.

end insert
begin insert

13(d) 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 delete
18

5433.  

(a) Regarding insurance, both of the following shall
19apply from the moment a participating driver logs on to the
20transportation network company’s application program until the
21driver logs off from that application program:

22(1) Transportation network company insurance shall be primary.

23(2) Transportation network company insurance shall have the
24duty to defend and indemnify.

25(b) Transportation network company liability insurance coverage
26shall be required at a lower amount from the moment a
27participating driver logs on to the transportation network company
28application program until that driver has a passenger match
29 accepted. This lower amount shall be at least fifty thousand dollars
30($50,000) for death and personal injury, at least one hundred
31thousand dollars ($100,000) for death and personal injury of two
32or more persons, and at least thirty thousand dollars ($30,000) for
33property damage, all per incident. The requirements for this
34coverage may be satisfied by any of the following:

35(1) A primary personal automobile liability insurance policy
36that recognizes the driver’s provision of transportation network
37company services.

38(2) An automobile liability insurance policy maintained by the
39transportation network company that provides primary coverage
40in the event a driver’s personal automobile insurance policy does
P7    1not recognize the driver’s provision of transportation network
2company services.

3(3) A combination of a primary automobile liability insurance
4policy that recognizes the driver’s provision of transportation
5network company services and an automobile liability insurance
6policy maintained by the transportation network company.

7(c) This section shall not limit the liability of a transportation
8network company arising out of an automobile accident involving
9a participating driver in any action for damages against a
10transportation network company for an amount above the required
11insurance coverage.

end delete
begin insert
12

begin insert5434.end insert  

Notwithstanding the coverage options described in
13Section 5433, during Periods One, Two, and Three, the vehicle
14used by a participating driver in transportation network company
15services shall be considered a public or livery conveyance and
16shall be considered as providing delivery of persons or passengers
17for compensation or a fee. Unless coverage for transportation
18network services is separately and specifically stated in an
19insurance policy and priced pursuant to approval by the
20Department of Insurance, a participating driver’s personal
21automobile insurance policy shall not provide coverage for
22transportation network company services, and the insurer under
23that policy shall have no duty to defend and indemnify for claims
24resulting from provision of those services.

end insert
begin insert
25

begin insert5435.end insert  

In a claims coverage investigation during Period One,
26Two, or Three, a transportation network company or its insurer
27shall cooperate with insurers who are involved in the claims
28coverage investigation to facilitate the exchange of information,
29including the provision of dates and times at which an accident
30occurred that involved a participating driver.

end insert
31

begin delete5434.end delete
32begin insert5436.end insert  

The commission and the Department of Insurance shall
33collaborate on a study of transportation network company insurance
34to assess whether coverage requirements are appropriate to the
35risk of transportation network company services in order to
36promote data-driven decisions on insurance requirements.

37

begin delete5435.end delete
38begin insert5437. end insert  

A transportation network company shall not disclose to
39a third party any personally identifiable information of a
P8    1transportation network company passenger unless one of the
2following apply:

3(1) The customer knowingly consents.

4(2) Pursuant to a legal obligation.

5(3) The disclosure is to the commission in order to investigate
6a complaint filed with the commission against a transportation
7network company or a participating driver and the commission
8treats the information under confidentiality protections.

9

begin delete5436.end delete
10begin insert5438.end insert  

It is the intent of the Legislature that the Department of
11Insurance expedite review of any application for approval of
12transportation network company insurance products.

13

begin delete5437.end delete
14begin insert5439.end insert  

The Legislature makes the following findings:

15(a) The commission has initiated regulation of transportation
16network companies as a new category of charter-party carriers and
17continues to develop appropriate regulations for this new service.

18(b) Given the rapidly evolving transportation network company
19service, it is the intent of the Legislature to continue ongoing
20oversight of the commission’s regulation of these services in order
21to enact legislation to adjust commission authority and impose
22specific requirements or prohibitions as deemed necessary as these
23services evolve.

begin insert
24

begin insert5440.end insert  

The Legislature does not intend, and nothing in this
25article shall be construed, to prohibit the commission from
26exercising its rulemaking authority in a manner consistent with
27this article, or to prohibit enforcement activities related to
28transportation network companies.

end insert
begin insert
29

begin insert5441.end insert  

Participating drivers of transportation network
30companies shall carry with them at all times during the provision
31of transportation network company services proof of insurance
32coverage, including any coverage from the driver’s own policy
33that is specifically written to cover the provision of transportation
34network company services, or coverage from a policy obtained by
35the transportation network company, or both, as applicable. In
36the event of an accident, a participating driver shall provide this
37insurance coverage information to any other party involved in the
38accident, and to a police officer, upon request.

end insert
P9    1

begin delete5438.end delete
2begin insert5442.end insert  

Notwithstanding Section 11580.9 of the Insurance Code,
3or any other law affecting whether one or more policies of
4insurance that may apply with respect to an occurrence is primary
5or excess, this article determines the obligations under insurance
6policies issued to transportation network companies and, if
7applicable, drivers providing transportation network services for
8transportation network companies.

9

SEC. 2.  

No reimbursement is required by this act pursuant to
10Section 6 of Article XIII B of the California Constitution because
11the only costs that may be incurred by a local agency or school
12district will be incurred because this act creates a new crime or
13infraction, eliminates a crime or infraction, or changes the penalty
14for a crime or infraction, within the meaning of Section 17556 of
15the Government Code, or changes the definition of a crime within
16the meaning of Section 6 of Article XIII B of the California
17Constitution.



O

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