NAIC rises above ‘No Action Is Contemplated’ on ride-sharing
Regular attendees of the National Association of Insurance Commissioners’ thrice-yearly meetings are known to joke that NAIC actually stands for “No Action Is Contemplated.”
At the group’s latest meeting in Phoenix, the Sharing Economy Working Group rendered the basis of that humor a little less true.
California Insurance Commissioner Dave Jones, chairman of the working group, oversaw the development, vetting and adoption of a white paper to assist both regulators and legislators as they approach insurance issues related to ride sharing. R Street was pleased to be an early participant in the white paper’s development and to contribute suggestions that were adopted into the paper.
The final and ultimately adopted draft of the white paper was presented to the working group with a supplemental handout that reflected a public policy compromise between insurers and transportation network companies. That compromise, publicly disclosed first by R Street, was presented to the working group by Jeff Sauls, vice president of state legislative affairs for Farmers Insurance and Gus Fuldner of Uber.
Together, they characterized the deal as a victory not only for the burgeoning new ride share industry, but also as a sensible balance of insurance standards.
They’re right. But what’s more, instead of crafting a deal designed to preclude certain market actors, the compromise is fundamentally accommodating to competition and further development of both the TNC industry and innovative new hybrid insurance products.
For his part, Commissioner Jones was vocal in his praise for the deal saying: “Congrats, this is a tremendously positive development.”
Now that a deal has been struck, it is necessary to effectuate it on a state-by-state basis. In some states, that might be easier said than done. Some states have short legislative sessions that are already coming to a close. Other states have already adopted their own TNC legislation and, given how acrimonious the early encounters between insurers and TNCs were, legislators in those states may be unexcited about revisiting the issue.
In the coming months, it will be crucial for TNCs and insurers to continue to work together to make sure their hard work translates into law.
Toward that end, the white paper can be of some assistance. In essence, it highlights the questions for which the compromise has the answers. When presented together, legislators and regulators will be able to see just how well-considered and carefully crafted the deal is. Both documents are borne of negotiation and concession.
It is worthwhile to note that the NAIC Sharing Economy Working Group process, while at times painful, played a crucial part in allowing insurers and TNCs to come together outside of the hitherto exclusively adversarial legislative context. Such a role is where the NAIC can really excel, particularly when it acts quickly to provide a forum and embraces and encourages involvement on as broad a scale as possible.
Commissioner Jones and his staff at the California Department of Insurance should also be lauded for their time and commitment to the issue, as should the staff at the NAIC. Together, their patience and dedication was responsible for the creation of a forum that should, itself, be considered as a model of openness and fairness.
Thus, while “No Action Is Contemplated” will continue to get chuckles, those close to the process know that, at least sometimes, the NAIC really can get stuff done.
