Amended in Senate August 20, 2014

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 Bill No. 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 would amend the Passenger Charter-party Carriers’ Act to enact specified requirements for liability begin delete and other end delete insurance coverage for transportation network companies, as defined, and their participating drivers. begin insert These requirements would become operative on July 1, 2015. end insert The bill would begin delete define 3 end delete begin insert describe 2 end insert distinct time periods begin delete that comprise transportation network company services, end delete and would specify the insurance requirements for each of those time periods and alternative methods of compliance with those requirements. begin insert The bill would require uninsured and underinsured motorist coverage to be provided for specified time periods. end insert The bill begin delete would require a transportation network company to verify that a participating driver carries and maintains the appropriate type of insurance coverage, as applicable, and, end delete begin insert would, end insert in the event a driver’s insurance policy ceases to exist begin delete , would require the end delete begin insert or has been canceled, or under certain other circumstances, require a end insert transportation network company’s insurance policy to provide the required coverage. begin delete 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 priced. end delete begin insert The bill, beginning on July 1, 2015, would provide that a participating driver’s or vehicle owner’s personal automobile insurance policy does not provide coverage to the participating driver, vehicle owner, or any 3rd party unless the policy so provides. The bill, beginning on July 1, 2015, would require certain written disclosures by transportation network companies to their participating drivers on the insurance coverage provided by the company and to advise that the driver’s personal automobile insurance policy will not provide coverage. The bill would require participating drivers to carry proof of insurance coverage, as specified. end 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:

SECTION 1.  

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

 

Article 7.  Transportation Network Companies

 

5430.  

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

5431.  

begin insert (a) end insert begin insert   end insert As used in this article, a “transportation network
company” is an organization, including, but not limited to, a
corporation, begin insert limited liability company, end insert partnership, sole proprietor,
or any other entity, operating in California that begin delete provides end delete begin insert enables end insert
prearranged transportation services for compensation using an
online-enabled application or platform to connect passengers with
drivers using begin delete their personal vehicles end delete begin insert a vehicle end insert .

begin insert

(b) As used in this article, “participating driver” or “driver”
is any person who uses a vehicle in connection with a
transportation network company’s online-enabled application or
platform to connect with passengers.

end insert begin insert

(c) As used in this article, “transportation network company
insurance” is a liability insurance policy that specifically covers
liabilities arising from a driver’s use of a vehicle in connection
with a transportation network company’s online-enabled
application or platform.

end insert

begin delete

5432.  

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

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

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

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

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

end delete

begin delete 5433. end delete
begin insert 5432. end insert   

(a) A transportation network company shall disclose in
writing to participating drivers, as part of its agreement with those
drivers, the insurance coverage and limits of liability that the
transportation network company provides begin delete while a end delete begin insert because the end insert
driver begin delete makes himself or herself available for transportation network
company services, end delete begin insert uses a vehicle in connection with a
transportation network company’s online-enabled application or
platform, end insert and shall advise a participating driver in writing that the
driver’s personal automobile insurance policy begin delete may end delete begin insert will end insert not provide
coverage while the driver begin delete makes himself or herself available for
transportation network company services. end delete begin insert uses a vehicle in
connection with a transportation network company’s
online-enabled application or platform. end insert

begin delete

(b) (1) A transportation network company shall maintain
insurance coverage that assumes all liability and provides other
coverages for transportation network company services during
Periods Two and Three, as described in subdivision (b) of Section
5432. The insurance limits and coverages shall include, but need
not be limited to, the requirements imposed by the commission
for transportation network companies relative to liability, medical
payments, comprehensive, collision, and uninsured and
underinsured motorist.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

end delete begin insert

(b) A transportation network company shall also disclose in
writing to participating drivers, as part of its agreement with those
drivers, that the driver’s personal automobile insurance policy
will not provide collision or comprehensive coverage for damage
to the vehicle used by the driver from the moment the driver logs
on to the transportation network company’s online-enabled
application or platform to the moment the driver logs off the
transportation network company’s online-enabled application or
platform.

end insert begin insert

(c) This section shall become operative on July 1, 2015.

end insert

begin delete

5434.  

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

end delete begin delete

5435.  

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

end delete begin insert

begin insert 5433. end insert   

(a) A transportation network company and any
participating driver shall maintain transportation network company
insurance as provided in this section.

(b) The following requirements shall apply to transportation
network company insurance from the moment a participating driver
accepts a ride request on the transportation network company’s
online-enabled application or platform until the driver completes
the transaction on the online-enabled application or platform or
until the ride is complete, whichever is later:

(1) Transportation network company insurance shall be primary
and in the amount of one million dollars ($1,000,000) for death,
personal injury, and property damage. The requirements for the
coverage required by this subdivision may be satisfied by any of
the following:

(A) Transportation network company insurance maintained by
a participating driver.

(B) Transportation network company insurance maintained by
a transportation network company.

(C) Any combination of subparagraphs (A) and (B).

(2) Transportation network company insurance coverage
provided under this subdivision shall also provide for uninsured
motorist coverage and underinsured motorist coverage in the
amount of one million dollars ($1,000,000) from the moment a
passenger enters the vehicle of a participating driver until the
passenger exits the vehicle. The policy may also provide this
coverage during any other time period, if requested by a
participating driver relative to insurance maintained by the driver.

(3) The insurer, in the case of insurance coverage provided
under this subdivision, shall have the duty to defend and indemnify
the insured.

(c) The following requirements shall apply to transportation
network company insurance from the moment a participating driver
logs on to the transportation network company’s online-enabled
application or platform until the driver accepts a request to
transport a passenger, and from the moment the driver completes
the transaction on the online-enabled application or platform or
until the ride is complete, whichever is later, until the driver either
accepts another ride request on the online-enabled application or
platform or logs off the online-enabled application or platform:

(1) Transportation network company insurance shall, be primary
and in the amount of at least one hundred thousand dollars
($100,000) for death and personal injury per person, three hundred
thousand dollars ($300,000) for death and personal injury per
incident, and fifty thousand dollars ($50,000) for property damage.
The requirements for the coverage required by this paragraph
may be satisfied by any of the following:

(A) Transportation network company insurance maintained by
a participating driver.

(B) Transportation network company insurance maintained by
a transportation network company that provides coverage in the
event a participating driver’s insurance policy under subparagraph
(A) has ceased to exist or has been canceled, the participating
driver does not otherwise maintain transportation network
company insurance pursuant to this subdivision.

(C) Any combination of subparagraphs (A) and (B).

(2) A transportation network company shall also maintain
insurance coverage that provides excess coverage of one million
dollars ($1,000,000) in total per occurrence to cover any liability
arising from a participating driver using a vehicle in connection
with a transportation network company’s online-enabled
application or platform within the time periods specified in this
subdivision, which liability exceeds the required coverage limits
in paragraph (1).

(3) The insurer providing insurance coverage under this
subdivision shall be the only insurer having the duty to defend any
liability claim arising from an accident occurring within the time
periods specified in this subdivision.

(d) Coverage under a transportation network company
insurance policy shall not be dependent on a personal automobile
insurance policy first denying a claim nor shall a personal
automobile insurance policy be required to first deny a claim.

(e) In every instance where transportation network company
insurance maintained by a participating driver to fulfill the
insurance obligations of this section has lapsed or ceased to exist,
the transportation network company shall provide the coverage
required by this section beginning with the first dollar of a claim.

(f) This article shall not limit the liability of a transportation
network company arising out of an automobile accident involving
a participating driver in any action for damages against a
transportation network company for an amount above the required
insurance coverage.

(g) This section shall become operative on July 1, 2015.

end insert begin insert

begin insert 5434. end insert   

(a) Nothing in this section shall be construed to require
a private passenger automobile insurance policy to provide
primary or excess coverage during the period of time from the
moment a participating driver in a transportation network company
logs on to the transportation network company’s online-enabled
application or platform until the driver logs off the online-enabled
application or platform or the passenger exits the vehicle,
whichever is later.

(b) During the period of time from the moment a participating
driver in a transportation network company logs on to the
transportation network company’s online-enabled application or
platform until the driver logs off the online-enabled application
or platform or the passenger exits the vehicle, whichever is later,
all of the following shall apply:

(1) The participating driver’s or the vehicle owner’s personal
automobile insurance policy shall not provide any coverage to the
participating driver, vehicle owner, or any third party, unless the
policy expressly provides for that coverage during the period of
time to which this subdivision is applicable, with or without a
separate charge, or the policy contains an amendment or
endorsement to provide that coverage, for which a separately
stated premium is charged.

(2) For the purposes of this article only, the vehicle used by the
participating driver shall be considered a public or livery
conveyance and shall be considered as providing delivery of
persons or passengers for compensation or a fee.

(3) The participating driver’s or the vehicle owner’s personal
automobile insurance policy shall not have the duty to defend or
indemnify for the driver’s activities in connection with the
transportation network company, unless the policy expressly
provides otherwise for the period of time to which this subdivision
is applicable, with or without a separate charge, or the policy
contains an amendment or endorsement to provide that coverage,
for which a separately stated premium is charged.

(c) This section shall become operative on July 1, 2015.

end insert begin insert

begin insert 5435. end insert   

In a claims coverage investigation, a transportation
network company or its insurer shall cooperate with insurers that
are involved in the claims coverage investigation to facilitate the
exchange of information, including the provision of dates and times
at which an accident occurred that involved a participating driver.

end insert

5436.  

The commission and the Department of Insurance shall
collaborate on a study of transportation network company insurance
to assess whether coverage requirements are appropriate to the
risk of transportation network company services in order to
promote data-driven decisions on insurance begin delete requirements. end delete
begin insert requirements, and shall report the findings of this study to the
Legislature no later than December 31, 2017. end insert

5437.  

A transportation network company shall not disclose to
a third party any personally identifiable information of a
transportation network company passenger unless one of the
following begin delete apply: end delete begin insert applies: end insert

(1) The customer knowingly consents.

(2) Pursuant to a legal obligation.

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

5438.  

It is the intent of the Legislature that the Department of
Insurance expedite review of any application for approval of
transportation network company insurance products begin insert , and that these
products become available for purchase on or before July 1, 2015 end insert .

begin insert

begin insert 5439. end insert   

Transportation network company insurance that meets
the requirements of Section 5433 shall be deemed to satisfy the
financial responsibility requirements of Sections 16054 and 16056
of the Vehicle Code.

end insert

begin delete 5439. end delete
begin insert 5440. end insert   

The Legislature makes the following findings:

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

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

begin delete 5440. end delete
begin insert 5441. end insert   

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

begin delete

5441.  

Participating drivers

end delete

begin insert

begin insert 5442. end insert   

end insert

begin insert A participating driver end insert of begin insert a end insert transportation network
begin delete companies end delete begin insert company end insert shall carry begin insert proof of transportation network
company insurance coverage end insert with begin delete them end delete begin insert him or her end insert at all times
during begin delete the provision of transportation network company services
proof of insurance coverage, including any coverage from the
driver’s own policy that is specifically written to cover the
provision of transportation network company services, or coverage
from a policy obtained by the transportation network company, or
both, as applicable end delete begin insert his or her use of a vehicle in connection with
a transportation network company’s online-enabled application
or platform end insert . In the event of an accident, a participating driver shall
provide this insurance coverage information to any other party
involved in the accident, and to a police officer, upon request.

begin delete 5442. end delete
begin insert 5443. end insert   

Notwithstanding Section 11580.9 of the Insurance Code,
or any other law affecting whether one or more policies of
insurance that may apply with respect to an occurrence is primary
or excess, this article determines the obligations under insurance
policies issued to transportation network companies and, if
applicable, drivers begin delete providing transportation network services for
transportation network companies. end delete begin insert using a vehicle in connection
with a transportation network company’s online-enabled
application or platform. end insert

SEC. 2.  

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