news.cuna.org/articles/Calif_ride-sharing_law_protects_CU_collateral

Calif. ride-sharing law protects CU collateral

September 19, 2014

SACRAMENTO, Calif. (9/22/14)--California Gov. Jerry Brown signed legislation Thursday that will require Transportation Network Companies (TNC) such as Uber and Lyft to buy at least baseline insurance on their vehicles. The new law will address concerns held by credit unions who have been on the line for reductions in collateral value when the cars those businesses use are involved in accidents (In the News Sept. 18).

Assembly Bill 2293, authored by Assemblywoman Susan Bonilla (D-Concord), also requires those companies to provide disclosures that outline any potential gaps in personal insurance auto-lines coverage for drivers using their own vehicles.

"While AB 2293 is a consumer protection bill, it represents much more than that," Bonilla said (In the News). "This measure symbolizes business flexibility, consumer affordability, political compromise and, most importantly, what true public policy should be: a collective process for all stakeholders to contribute."

Credit unions through the California and Nevada Credit Union Leagues worked closely with Bonilla on pushing forward the legislation, which was heavily opposed by the TNC companies. 

The bill also received some help from credit unions through the Leagues' "Connect for the Cause" email-alert grassroots system.

The new legislation:

  • Creates a personal insurance firewall to ensure personal insurance auto policyholders will no longer subsidize the commercial activity of TNCs, beginning July 1, 2015;
  • Lowers the primary insurance coverage requirements in the timeframe formerly known as "App On To Match" to $50,000/$100,000/$30,000, with excess coverage of $200,000;
  • Ensures oversight by the California Public Utilities Commission of TNCs, such as Uber and Lyft; and
  • Expedites the approval process for new TNC insurance products.

"AB 2293 sets the standard for this innovative industry, ensuring consumer protection and public safety remains a top priority," Bonilla added. "This legislation also reinforces corporate responsibility, safeguarding taxpayers from subsidizing the cost of commercial activity."