BILL NUMBER: AB 2293 AMENDED
BILL TEXT
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
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.
The
The 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. The bill would authorize a
personal automobile insurer to offer such coverage at its discretion
to cover private vehicles, as specified. 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 enables
provides prearranged transportation services for
compensation using an online-enabled application or platform to
connect passengers with drivers using a personal 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 because
while 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 while because 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.
(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.
(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 one hundred fifty
thousand dollars ($100,000) ($50,000)
for death and personal injury per person, three
one hundred thousand dollars ($300,000)
($100,000) for death and personal injury per
incident, and fifty thousand dollars ($50,000)
thirty thousand dollars ($30,000) 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, or 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 one million
dollars ($1,000,000) in total five hundred thousand
dollars ($500,000) 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.
(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.
(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.
(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)
( 2) 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.
(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.
(c)
( d) 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.