NAFTA Officials move in on Final Details Prior to Border Crossing Openings

June 3, 2002

Transportation officials from Canada, Mexico and the United States, as well as insurance and trucking representatives from those countries, met this week to review final safety, implementation and insurance concerns before Texas and California borders are opened under the North American Free Trade Agreement (NAFTA) in mid-July.

The National Association of Independent Insurers (NAII) attended a special session devoted to insurance issues affecting cross-border trucking chaired by Texas Insurance Commissioner Jose Montemayor, who also leads the National Association of Insurance Commissioners’ (NAIC) NAFTA Subgroup.

David M. Golden, NAII Director of Commercial Lines, explained that NAII believes that the Department of Transportation’s rules have “crossed the finish line” in addressing insurers’ safety concerns regarding NAFTA.

“We are pleased that the implementation rules require Mexican trucking companies to have valid insurance from a U.S. licensed insurance company and that vehicles will only be able to enter the U.S. at commercial border crossings when a certified inspector is on duty,” Golden explained. “In addition, DOT is training additional inspectors to meet the demands of the increased truck traffic, all of these factors are critical to protecting American motorists. After a six-year battle to highlight important safety concerns regarding the NAFTA agreement, it appears that many of our recommendations are now in place.”

The Tri-national Insurance Working Group led by Commissioner Montemayor also discussed important insurance underwriting concerns.

Golden explained that auto insurance for motor carriers currently is written by both standard and surplus lines insurance companies. State insurance regulators have successfully convinced federal transportation and safety officials to adopt the position that both types of insurers are capable of providing this important coverage for Mexican motor carriers that choose to serve U.S. markets.

“Surplus lines insurance companies will be important because they will keep the market viable by ensuring availability of insurance for Mexican trucks traveling throughout the United States. That is why NAII has urged Congress and the Department of Transportation to adopt a broad interpretation of ‘licensed insurer to include surplus lines’ insurers,'” Golden said.

The three-day Land Transportation Conference also included a review of the new database created by the Mexican Transportation Agency that will track Mexican drivers’ hours of service, valid drivers licensing and safety records and other factors now required of American truck drivers.

“NAII believes this database will enhance and promote safety and consistency between the three countries,” Golden commented. “The challenge now is to make this information available to American underwriters as they evaluate the insurance risks associated with Mexican motor carriers operating in the United States. Discussing this issue face to face this week with Mexican transportation officials brings us all closer to the goal of sharing this important underwriting information.”

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