BILL NUMBER: AB 2293 AMENDED
BILL TEXT
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
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 and other
insurance coverage for transportation network companies, as
defined, and their participating drivers. These requirements
would become operative on July 1, 2015. The bill would
define 3 describe 2 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 uninsured and underinsured
motorist coverage to be provided for specified time periods.
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,
would, in the event a driver's insurance policy ceases to
exist , would require the or has been
canceled, or under certain other circumstances, require a
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 priced. 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 th
e driver's personal automobile insurance policy will not
provide coverage. The bill would require participating drivers to
carry proof of insurance coverage, as specified. 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. (a) As used in this article, a
"transportation network company" is an organization, including, but
not limited to, a corporation, limited liability company,
partnership, sole proprietor, or any other entity, operating in
California that provides enables
prearranged transportation services for compensation using an
online-enabled application or platform to connect passengers with
drivers using their personal vehicles a
vehicle .
(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.
(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.
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.
5433. 5432. (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 while a because the driver
makes himself or herself available for transportation
network company services, uses a vehicle in connectio
n with a transportation network company's online-enabled
application or platform, and shall advise a participating
driver in writing that the driver's personal automobile insurance
policy may will not provide coverage
while the driver makes himself or herself available for
transportation network company services. uses a
vehicle in connection with a transportation network company's
online-enabled application or platform.
(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.
(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.
(c) This section shall become operative on July 1, 2015.
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.
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.
5433. (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.
5434. (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.
5435. 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.
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 requirements.
requirements, and shall report the findings of this study to the
Legislature no later than December 31, 2017.
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
apply: applies:
(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 , and that
these products become available for purchase on or before July 1,
2015 .
5439. 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.
5439. 5440. 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.
5440. 5441. 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.
5441. Participating drivers
5442. A participating driver of a
transportation network companies
company shall carry proof of transportation network
company insurance coverage with them
him or her at all times during 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
his or her use of a vehicle in connection with a transportation
network company's online-enabled application or platform . 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.
5442. 5443. 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 providing
transportation network services for transportation network companies.
using a vehicle in connection with a transportation
network company's online-enabled application or platform.
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.