NAFTA: Borders Open, Regulators Review Privacy and Inspection Concerns

Although the Bush Administration technically opened selected border crossings under the North American Free Trade Agreement (NAFTA) on Nov. 27, two key issues have arisen that could keep Mexican commercial vehicles from moving down the road as expected.

The National Association of Insurance Commissioners (NAIC) is addressing these issues at the Joint Meeting of the NAIC’s NAFTA Subgroup and the TriNational Insurance Working Group during its winter meeting in San Diego, Dec. 7 -11.

The first issue centers on two privacy bills now working their way through the Mexican federal legislature. The bills could have an impact on whether American insurance companies will be able to underwrite Mexican trucks because the legislation could prevent companies from accessing Mexican motor vehicle records (MVRs).

The National Association of Independent Insurers (NAII) sent comments to the Texas Insurance Commissioner and NAIC Committee Chairman Jose Montemayor recently voicing its concern about the situation.

“Motor vehicle records have always been critical underwriting tools for automobile underwriters. The privacy provisions that the federal Mexican legislature is considering have created an unexpected and possibly an unintended consequence regarding access to MVR records,” David Golden, NAII director of commercial lines, said. “Access to MVRs will not be a problem for Mexican employers in Mexico, but the lack of MVR access for American companies could prevent American underwriters from offering insurance to Mexican motor carriers who wish to carry goods to the interior U.S. NAII’s position is that having access to motor vehicle records is
imperative if Mexican motor carriers are to find insurance for travel throughout the United States.”

Golden praised the Mexican government for its efforts to comply with
European privacy requirements and also for developing the computerized federal database system over the last five years to help make information about Mexican commercial vehicles available to U.S. insurers.

Golden also asked the NAIC Subcommittee to look carefully into the privacy bills for clarification about exactly what effect they might have on MVR access if either bill passes and becomes law.

“We have come along way in the last few years to find ways to provide insurance support for cross-border trucking. Now that the transportation issues seem to be worked out, it would be a shame to see those efforts thwarted because insurers cannot access critical safety information on foreign drivers,” Golden said in his letter to the NAIC.

Additional agenda items for the joint NAIC meeting on NAFTA include
workers’s compensation, power of attorney and undertaking (known as PAU) between U.S. and Canada, and using reinsurance and surety bonds as alternatives to direct insurance of Mexican motor carriers.

The other issue that is a major concern is that the Mexican
government issued a statement saying that on-site inspections of Mexican trucks in Mexico creates an unlevel playing field. Some news accounts have said that the Mexican government has cried “foul” regarding their trucks having to have on-site inspections, although U.S. trucks do have on-site checks.

However, American trucks have on-site inspection before getting permanent authority to operate while Mexican motor carriers are required to have on-site inspections before they can get provisional authority, the first level of authority to operate. According to sources, as many as 62 applications are delayed because of the inability of the U.S. Department of Transportation to enter Mexico and make on-site inspections.

“This matter must be worked out between the two governments and we are hopeful that this issue will be resolved quickly,” Golden said.

Topics Carriers USA Mexico