Amended in Senate August 22, 2014

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 insurance coverage for transportation network companies, as defined, and their participating drivers. These requirements would become operative on July 1, 2015. The bill would describe 2 distinct time periods 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, in the event a driver’s insurance policy ceases to exist or has been canceled, or under certain other circumstances, require a transportation network company’s insurance policy to provide the required coverage. begin delete The end delete

begin insert The end insert 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. begin insert The bill would authorize a personal automobile insurer to offer such coverage at its discretion to cover private vehicles, as specified. end insert 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 begin delete enables end delete begin insert provides end insert
prearranged transportation services for compensation using an
online-enabled application or platform to connect passengers with
drivers using a begin insert personal end insert 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) 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 because end delete begin insert while end insert the driver
uses a vehicle in connection 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 will not provide coverage begin delete while end delete
begin insert because end insert the driver uses a vehicle in connection with a
transportation network company’s online-enabled application or
platform.

(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.

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.

begin insert

(4) A transportation network company may meet its obligations
under this subdivision through a policy obtained by a participating
driver pursuant to subparagraph (A) 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.

end insert

(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 begin delete one hundred end delete begin insert fifty end insert thousand dollars
begin delete ($100,000) end delete begin insert ($50,000) end insert for death and personal injury per person,
begin delete three end delete begin insert one end insert hundred thousand dollars begin delete ($300,000) end delete begin insert ($100,000) end insert for
death and personal injury per incident, and begin delete fifty thousand dollars
($50,000) end delete begin insert thirty thousand dollars ($30,000) end insert 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, begin insert or end insert 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 begin delete one million
dollars ($1,000,000) in total end delete begin insert five hundred thousand dollars
($500,000) end insert 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.

begin insert

(4) A transportation network company may meet its obligations
under this subdivision through a policy obtained by a participating
driver pursuant to subparagraph (A) 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.

end insert

(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.

begin delete

(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)

end delete

begin insert ( end insert begin insert 2) end insert  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.

begin insert

(c) Notwithstanding any other law, a personal automobile
insurer may, at its discretion, offer an automobile liability
insurance policy, or an amendment or endorsement to an existing
policy, that covers a private passenger vehicle, station wagon type
vehicle, sport utility vehicle, or similar type of vehicle with a
passenger capacity of eight persons or less, including the driver,
while used in connection with a transportation network company’s
on-line enabled application or platform only if the policy expressly
provides for the coverage during the time period specified in
subdivision (b), with or without a separate charge, or the policy
contains an amendment or an endorsement to provide that
coverage, for which a separately stated premium may be charged.

end insert begin delete

(c)

end delete

begin insert ( end insert begin insert d) end insert  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, 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 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.

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.

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.

5442.  

A participating driver of a transportation network
company shall carry proof of transportation network company
insurance coverage with him or her at all times during 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.

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 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.