BILL NUMBER: AB 2293 AMENDED
BILL TEXT
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 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 req
uirements. 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.
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. 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.