It’s been looming since spring – speculation about the Federal Motor Carrier Safety Administration’s (FMCSA) intent regarding minimum liability insurance requirements for trucking companies. Will regulators increase the amount?
As James Jaillet wrote in a recent article, “FMCSA’s insurance increase rule will come slowly, if ever, says ATA policy chief,” concern first surfaced following an April report from the FMCSA that recommended an increase from the current minimum limit of $750,000 to a $1,000,000 minimum. Since then, little more has been formally accomplished other than the pending publication of an “Advanced Notice of Proposed Rulemaking,” which is merely an FMCSA report posing 26 questions to trucking companies and other industry stakeholders to garner feedback.
In other words, the ruling is still in the fact-finding stage, or as Dave Osiecki, chief of advocacy for the American Trucking Association, characterized it to Jaillet, it’s merely a “pre-rule.” Osiecki maintains it may never go further, speculating that politics may eventually come into play. As he explained, “I strongly suspect that this is a rule that will get delayed and perhaps never even see the light of day.” He added that regardless which political party occupies the White House, about a year before presidential elections, the pace of regulatory changes slows. For that reason, he said that the insurance increase rule could fall prey to that slowdown, even though it is about a year away. “We don’t know that. We will have to wait and see,” he stated. “But we’re a long way from a proposed change.”
In a subsequent article by Jaillet, “FMCSA’s work to raise liability insurance minimums hinges on these questions,” it is noted that responders have until February 26th to offer their formal input about the proposed increase on the regulations.gov portal. One could speculate how answers might lean based on Jaillet’s observation that trucking groups, like the American Trucking Associations and the Owner-Operator Independent Drivers Associations, “contend that just one percent of all trucking-related crashes exceed the minimum, therefore making it impractical to impose an increase and the probable burden of increased premiums on motor carriers.”
Why did the FMCSA initiate a report in the first place? Because it was required by law. In fact, the Moving Ahead for Progress in the 21st Century Act, signed by President Obama in July 2012, requires a report on current minimum financial responsibility requirements for motor carriers every four years. So this is a process we will go through again in 2018. In the meantime, minimum requirements remain at current levels and you can rest easy knowing Canal will continue to monitor industry news and keep you informed of any anticipated changes.