May 3, 2017

PIACT offers testimony in support of TNC legislation, voices reservations about the current proposal

HARTFORD, Conn.—In testimony before the state Senate Insurance & Real Estate Committee on April 18, Professional Insurance Agents of Connecticut President Kenneth A. Distel offered testimony supporting legislation that would create comprehensive legislation for transportation network companies. However, Distel noted the association’s concerns with insurance gaps that would be created by H.B.7126 to establish insurance requirements for taxicabs.

PIACT has advocated for the adoption of comprehensive regulations for TNCs in the state since 2015. One of the association’s primary goals for regulating these companies is to eliminate gaps in insurance, which can lead to nonpayment for injuries and damages caused by auto accidents, putting drivers, passengers, pedestrians and others at risk.

In his testimony, Distel explained that H.B.7126 would create a gap in insurance because it repeals existing statutory insurance requirements for taxicabs and liveries leaving them without a suitable replacement.

"As drafted, the bill brings taxicabs and liveries under what is essentially the same insurance regulatory regime applicable to TNCs," said Distel. "Specifically, the coverage requirements that apply to TNC drivers during period 1 [when they are connected to an internet-software application, but not currently transporting a passenger] will now also apply to taxi and livery drivers. The bill does not define an internet-software application; require the taxi or livery driver to be connected to an internet application; or address the issue of coverage should the taxi or livery driver not be connected to such an application."

Distel further explained how the lack of definitions in the bill creates a coverage gap when taxicabs and liveries engage in activity not covered under the TNC model (e.g., picking up street hails; being dispatched via radio to pick up passengers for hire).

"If the bill is legislated in its current form, there are presumably no minimum liability requirements for a taxi or livery vehicle that is not connected to an internet-software application during period 1," said Distel. "This creates a situation in which the mandatory commercial limits during this period could be interpreted as either being nonexistent or as permissible to be well below those required when they are connected."

Distel recommended the following changes regarding H.B.7126: adjustments to regulations covering taxicabs and livery insurance should be made in separate legislation; if adjustments are made, gaps in insurance coverages should be avoided; and insurance policies should be priced based on the presented risk.

"PIACT appreciates the concern that the Senate Committee has demonstrated for our state’s ride-hailing public and those who will drive in that industry," said Distel. "We want to make sure that they are safe and when accidents happen, they are adequately covered. PIA looks forward to working with the committee on H.B.7126 toward this mutual goal." 

PIACT is a trade association representing professional, independent insurance agencies, brokerages and their employees throughout the state.

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