Florida Surplus Lines Service Office Reminds HB 221 Allows Transportation Network Company-Related Surplus Lines Coverage

 

The Florida Surplus Lines Service Office advised today, May 24, 2017, that among the many insurance-related provisions of HB 221 relating to Transportation Network Companies (“TNCs”) is clarification that providers such as Uber and Lyft, and any other entity that meets the definition of a TNC can now seek coverage from the surplus lines markets to satisfy the state financial responsibility requirements.

The eligible surplus lines insurer must have a financial strength rating of superior, excellent, exceptional or equivalent by a rating agency acceptable to the Florida Office of Insurance Regulation.  The law goes in effect on July 1, 2017.

To view the enrolled bill text, click here.

A complete legislative summary of HB 221 is attached for review.

An overview of the bill is provided below.

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HB 221, signed into law by Governor Rick Scott on May 9, 2017 as Chapter 2017-12, L.O.F., creates statewide requirements for TNCs.  The new law pre-empts any local ordinances or rules on TNCs and provides that state law will regulate TNCs.  It also prohibits local governments from imposing taxes, licensing requirements, or other restrictions on TNCs.

HB 221 provides minimum insurance requirements for TNCs and TNC drivers.  When a TNC driver is logged onto the digital network but not engaged in a pre-arranged ride, the legislation requires:

• Primary automobile liability coverage of at least $50,000 for death and bodily injury per person, $100,000 for death and bodily injury per incident, and $25,000 for property damage;
• Personal Injury Protection (“PIP”) insurance benefits that meet the minimum coverage amounts required under the Florida Motor Vehicle No-Fault Law; and
• Uninsured and underinsured vehicle coverage as required by law.

When a TNC driver is engaged in a pre-arranged ride the bill requires:

• Primary automobile liability coverage of at least $1 million for death, bodily injury, and property damage;
• PIP benefits that meet the minimum coverage amounts required of a limousine under Florida Motor Vehicle No-Fault Law; and
• Uninsured and underinsured vehicle coverage as required by law.

The bill authorizes an automobile insurer not providing TNC insurance to exclude coverage provided to an owner or operator of a TNC vehicle while driving that vehicle if logged on to the digital network or providing  a prearranged ride.

The bill requires the TNC to conduct, or have a private third-party conduct, a local and national criminal background check on its drivers every three years, and a driving record check once when the person applies as a TNC driver.  The bill prohibits the TNC from hiring a person as a TNC driver if he or she has been convicted of certain crimes or a certain number of moving violations.  

To ensure that the TNC has complied with the requirement of background checks, the bill requires the TNC to submit an examination report prepared by an independent certified public accountant to the Florida Department of Financial Services and provides for penalties if the TNC fails to comply with the background check requirements.

The bill requires a TNC to implement a zero tolerance policy on the use of drugs and alcohol by its drivers, and to suspend a driver during the length of an investigation, if a rider registers a complaint of drug or alcohol use.  All TNCs must adopt policies on nondiscrimination and disability access.

In addition, the bill:

• Requires a TNC to maintain an agent for service of process;
• Requires a TNC to disclose information on fares to riders before the beginning of pre-arranged rides;
• Requires a TNC driver to carry proof of insurance;
• Requires a TNC’s digital network to display a photograph of the TNC driver and the license plate number of the TNC vehicle;
• Provides that TNC drivers are independent contractors if certain conditions are met;
• Prohibits TNC drivers from accepting rides for compensation outside of the TNC’s digital network and from soliciting or accepting street hails; and
• Requires TNCs to maintain records on riders and TNC drivers.

 

 

Should you have any questions or comments, please contact Colodny Fass.

 

 

 

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