BILL ANALYSIS Ó
AB 2293
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2293 (Bonilla)
As Amended August 26, 2014
Majority vote
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|ASSEMBLY: |71-0 |(May 27, 2014) |SENATE: |30-4 |(August 27, |
| | | | | |2014) |
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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
effect.
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
platform.
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
services.
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
complaint.
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
defend.
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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appropriate.
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)
319-2083
FN: 0005527