BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 2293
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          AB 2293 (Bonilla)
          As Amended  August 26, 2014
          Majority vote
          |ASSEMBLY:  |71-0 |(May 27, 2014)  |SENATE: |30-4 |(August 27,    |
          |           |     |                |        |     |2014)          |
           Original Committee Reference:    U. & C.  

           SUMMARY  :  Establishes guidelines for insurance coverage for  
          Transportation Network Companies (TNCs) to ensure personal and  
          financial safety of consumers.  Specifically,  this bill  :  

          1)Codifies the California Public Utilities Commission's (PUC)  
            definition of TNC.

          2)Requires TNCs to inform drivers about insurance coverage and  
            limits offered by the TNC when providing TNC services and that  
            a driver's personal auto coverage may not provide coverage  
            when operating as a TNC.

          3)Defines when personal and commercial auto insurance is in  

           The Senate amendments  :

          1)Amend the Passenger Charter-party Carrier's Act to enact  
            specified requirements for liability and other insurance  
            coverage for TNCs and their participating drivers.

          2)Impose specified requirements relating to insurance coverage,  
            indemnity, and liability on transportation network companies  
            effective July 1, 2015.

          3)Allow a TNC to meet these requirements through any combination  
            of insurance products - driver purchased, TNC purchased, or a  
            combination of two policies.

          4)Specify a TNC may meet its insurance obligations through a  
            policy obtained by a participating driver only if the TNC  
            verifies that the policy is maintained by the driver and is  
            specifically written to cover the driver's use of a vehicle in  


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            connection with a TNC's online-enabled application or  

          5)Require a TNC to maintain insurance coverage that provides  
            excess coverage insuring the TNC and the driver in the amount  
            of $200,000 per occurrence to cover a liability arising from a  
            participating driver using a vehicle in connection with a  
            TNC's online-enabled application or platform within the time  
            periods specified, which liability exceeds the required  
            coverage limits.

          6)Specify what information shall be reported in a claims  
            coverage investigation.

          7)Define "participating driver," "transportation network  
            insurance," and "transportation network company."

          8)Require TNCs, effective July 1, 2015, to notify drivers that  
            the driver's personal auto policy and comprehensive collision  
            coverage will not cover the driver while providing TNC  

          9)Specifies that coverage under commercial auto policies is not  
            dependent on a personal auto policy first denying a claim or a  
            requirement that a personal auto policy first deny a claim.

          10)Require drivers to carry proof of insurance while driving.

          11)Require the PUC and Department of Insurance to collaborate on  
            a study of TNC insurance by December 31, 2017.

          12)Prohibit a TNC from disclosing the personally identifiable  
            information of a passenger unless it obtains the consent of  
            the customer, or is required pursuant to a legal obligation,  
            or if the PUC requests this information in response to a  

          13)Specify the Legislature's intent relating to expediting the  
            approval of TNC insurance products, and sets forth related  
            legislative findings and declarations.

           FISCAL EFFECT  :  Unknown.  This bill is keyed non-fiscal by the  
          Legislative Counsel. 

           COMMENTS  :  According to the author, "AB 2293 addresses insurance  


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          issues surrounding TNCs and ensures both drivers and consumers  
          are protected.  The bill makes a clear distinction between  
          personal and commercial use of vehicles for incidences involving  
          TNCs.  AB 2293 also ensures that all parties are aware of the  
          insurance coverage in place, clarifies when the TNC insurance  
          coverage comes into effect, and ensures that this coverage is  
          the primary insurance coverage."

          1)TNC shall maintain liability insurance.  Key provisions in  
            this bill would require a TNC or TNC driver, as of July 1,  
            2015, to maintain primary liability insurance coverage at the  
            following levels:

             a)   $100,000 per person and $300,000 per occurrence for  
               death and personal injury, and $50,000 for property damage  
               from the moment a driver logs on to the application until  
               the driver accepts a ride request.  This policy shall have  
               the duty to defend.

             b)   $1 million for personal injury and property damage from  
               the moment a driver logs on to the application until the  
               driver accepts a ride request.  This policy shall have the  
               duty to defend. 

             c)   $1 million for personal injury and property damage from  
               the moment a ride request is accepted until the passenger  
               exits the vehicle.  This policy shall have the duty to  

          2)Flexibility in type of insurance policy.  This bill also  
            provides TNCs business flexibility by allowing the driver to  
            purchase a smaller policy for the period before a ride match  
            is accepted, accompanied by a TNC purchased excess policy  
            which brings coverage levels up to the  
            $100,000/$300,000/$50,000 level.

          3)Specifies excess liability coverage as of July 2015.  If this  
            bill is enacted, before a ride match is made, as of July 1,  
            2015, requires the TNC to obtain excess liability coverage to  
            protect the driver and the TNC so that the total coverage  
            amount equals $1 million.  

          4)This bill mandates excess insurance during the "app-on" to  
            "match" period of "at least" $200,000.  Nothing in the bill  
            restricts the PUC from determining that higher limits are  


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          5)Mandated insurance levels are a minimum.  The public policy  
            supporting insurance mandates is the protection of the public  
            in the event innocent parties are harmed by the insured's  
            behavior.  An insured can be liable for greater damages that  
            what is covered by insurance, notwithstanding that there is a  
            minimum mandated amount.  The result of lowering the mandated  
            amount of insurance is to place a greater risk on the innocent  
            public who, if seriously injured, forces them to seek damages,  
            not from a regulated insurance company with a duty to pay, but  
            rather from the driver or the driver's company, who may or may  
            not have resources to pay the damages.

          6)Area for further study.  This bill requires the PUC and the  
            Department of Insurance to study TNC insurance rates and  
            report to the Legislature by December 31, 2017.

          Analysis Prepared by  :    DaVina Flemings / U. & C. / (916)  

                                                               FN: 0005527