NAII, Insurer Groups Address Truck Crossing Concerns

April 4, 2002

The United States Department of Transportation’s (DOT) safety requirements for trucks, buses and drivers entering this country under the North American Free Trade Agreement (NAFTA) aim at having Mexican carriers meet most U.S. safety standards before selected border crossings open mid-year 2002.

“The safety requirements issued by DOT this month are ones that NAII believes offer some protection to the American driving public as NAFTA goes forward,” David M. Golden, National Association of Independent Insurers (NAII) director of commercial lines, commented. “The questions that cannot be answered yet are, will these safety mandates be tough enough and are they enforceable? Unfortunately, the answer to those questions will only be apparent after the borders are open.”

Golden said that the NAII Commercial Auto Committee will meet later this month to review more closely the DOT mandates and implementation rules of the Federal Motor Carrier Safety Administration (FMCSA).

Some of the DOT safety rules, according to the NAII, will require Mexican motor carriers to have drug and alcohol-testing programs, a system of compliance with U.S. Federal hours-of-service requirements, and adequate data and safety management systems. A safety audit will be conducted by qualified U.S. inspectors to determine if the trucks and drivers have met these requirements prior to receiving provisional authority to operate in this country.

In addition, Mexican motor carriers wishing to operate in the U.S. will need a distinctive USDOT number, have their vehicles pass a safety inspection and undergo intensified safety monitoring during the 18-month provisional period.

“Mexican commercial vehicles will be permitted to enter this country only at commercial border crossings and only when a certified motor carrier safety inspector is on duty,” Golden says. “These two factors are critical to the success of these safety measures because without enough monitoring at crossings, the system will fail to protect the American motorist.”

The DOT implementation rules also call for Mexican vehicles to have valid insurance with U.S.-licensed insurance companies, NAII noted.

“The NAII early on suggested to transportation officials and others that the U.S. surplus lines insurance companies, now writing insurance for many Mexican carriers, should be allowed to continue, particularly in cases where the surplus lines insurance writers will keep the market viable and ensure availability as the Mexican insurance market matures, Golden adds. “The National Association of Insurance Commissioners’ (NAIC) NAFTA Subgroup adopted a recommendation this month to support a broad interpretation of the term “licensed” insurer in HR 2299, the transportation appropriations bill. NAII strongly supports this recommendation regarding a broad interpretation that includes surplus lines writers as well as the support for the safety initiatives in HR 2299.”

According to Golden, the NAIC recommendation also gives a thumbs up to development of a priority list of safety databases in Mexico and, in the interim, a list of U.S. underwriters that would consider insuring Mexican motor carriers in order to assist the Mexican authorities with preliminary construction of their database. The recommendation supports automating drivers licensing information, currently housed in Mexico City on paper, and suggests that the database be available to U. S. insurers.

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