CDI ready to review ride-sharing insurance
Reasonable observers of California government must give credit when credit is due. In this case, the good news is that the California Department of Insurance reports it is prepared to review auto insurance policies for transportation network company drivers. The alacrity with which the CDI is acting is worthy of praise as the best of what the administrative state aspires to be – equal parts thoughtful and responsive.
Last session, the Legislature in Sacramento passed A.B. 2293, introduced by Assemblywoman Susan Bonilla, D-Concord. The bill’s genesis was tumultuous, but the final result ultimately earned at least tacit support from nearly all interested parties. For its part, the CDI expressed concerns about the bill – and continues to do so – but demonstrated admirable restraint by tempering its criticism at moments in which condemnation might have proven fatal.
In addition to creating a regulatory structure through which the new industry can be understood, A.B. 2293 also directed the CDI to encourage insurers to develop new types of insurance to accommodate TNCs. The CDI took this charge seriously by endeavoring to lay the necessary groundwork for insurers to overcome the regulatory hurdles required to sell TNC policies.
The importance of reviewing policy filings in such short order is that these crucial product innovations will require a long lead-time to make their way through the Prop 103 approval process, which tends to be drawn out needlessly by time-wasting private intervenors. The sooner that commercial coverages and endorsements on personal auto policies are approved, the sooner the market for these specialized products will normalize the cost of doing business for TNC drivers.
Consumers stand to benefit from the emergence of another sector in the transportation-for-hire industry. For one, while a causal relationship has not yet been shown, there is good reason to believe TNCs may be responsible for a decrease in the incidence of drunk-driving arrests. What’s more, insofar as TNCs reduce the number of single-occupant trips taken each day, there is an environmental upside, as well.
Deserved or not, regulators are often targets of public scorn. To those of us on the outside, they can appear monolithic, unaccountable and out-of-touch. But in this case, there was really no obvious reason for the CDI to move quickly. They could have invented countless reasons to sit on the matter. However, they did not sit on it, and now the benefits of TNCs will flow to Californians more quickly.
Perhaps it was a recognition of the deleterious effect of Prop 103 and its crippling effect on quick rate action. Perhaps it was a recognition of the benefits accruing from this disruptive technology. Whatever the reason, business must be both surprised and encouraged by this cooperative act of good faith.
