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AB-2293 Transportation network companies: insurance coverage.(2013-2014)

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AB2293:v94#DOCUMENT

Amended  IN  Senate  July 02, 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— 2013–2014 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 impose specified requirements relating to insurance coverage, indemnity, and liability on transportation network companies, as defined, including requiring a transportation network company to disclose to participating drivers the company’s insurance coverage and limits of liability. The bill would specify that the transportation network company’s insurance is primary, and would impose a duty to defend and indemnify on the transportation network company 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. The bill would define 3 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 a transportation network company to verify that a participating driver carries and maintains the appropriate type of insurance coverage, as applicable, and, in the event a driver’s insurance policy ceases to exist, would require the 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 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   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.
 As used in this chapter article, a “transportation network company” is an organization, including, but not limited to, a corporation, partnership, or sole proprietor, or any other entity, operating in California that provides prearranged transportation services for compensation using an online-enabled application or platform to connect passengers with drivers using their personal vehicles.

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.

5432.5433.
 (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 driver makes himself or herself available for transportation network company services, and shall advise a participating driver in writing that the driver’s personal automobile insurance policy may not provide coverage while the driver makes himself or herself available for transportation network company services.
(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.

5433.

(a)Regarding insurance, both of the following shall apply from the moment a participating driver logs on to the transportation network company’s application program until the driver logs off from that application program:

(1)Transportation network company insurance shall be primary.

(2)Transportation network company insurance shall have the duty to defend and indemnify.

(b)Transportation network company liability insurance coverage shall be required at a lower amount from the moment a participating driver logs on to the transportation network company application program until that driver has a passenger match accepted. This lower amount shall be at least fifty thousand dollars ($50,000) for death and personal injury, at least one hundred thousand dollars ($100,000) for death and personal injury of two or more persons, and at least thirty thousand dollars ($30,000) for property damage, all per incident. The requirements for this coverage may be satisfied by any of the following:

(1)A primary personal automobile liability insurance policy that recognizes the driver’s provision of transportation network company services.

(2)An automobile liability insurance policy maintained by the transportation network company that provides primary coverage in the event a driver’s personal automobile insurance policy does not recognize the driver’s provision of transportation network company services.

(3)A combination of a primary automobile liability insurance policy that recognizes the driver’s provision of transportation network company services and an automobile liability insurance policy maintained by the transportation network company.

(c)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.

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.

5434.5436.
 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.

5435.5437.
 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:
(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.

5436.5438.
 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.

5437.5439.
 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.
 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 of transportation network companies shall carry with them 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. 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.

5438.5442.
 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.

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.