ADMINISTRATIVE RULE FOR PRIVATE FOR-HIRE TRANSPORTATION – ALTERNATIVES TO INSURANCE
Administrative Rule Adopted by Portland Bureau of Transportation Pursuant to Rule-Making Authority Portland City Code 16.40.970 K.
16.40.970 Administrative Rule Authority and Process
K. Notwithstanding Subsection 16.40.970 M, the Director may adopt an interim rule without prior public notice or Committee action upon a finding that a failure to act promptly will likely result in prejudice to the public interest of the affected parties. If the Director adopts a rule under this subsection, the Director must state the specific reasons for such prejudice. Any interim rule adopted pursuant to this Subsection is effective for a period of no longer than 120 days.
Under the authority of 16.40.970 J., I am adopting Interim Administrative Rule TRN-14.26 to provide standards to allow for alternative forms of insurance under Portland City Code 16.40.130 M., 16.40.330 M., 16.40.430 M., 16.40.630 M. Administrative Rule TRN-14.26 shall become effective on September 1, 2016.
The relevant Code and Administrative Rule language provides:
M. Alternatives to insurance, such as self-insurance, may occur only if the level of coverage and the terms, conditions and obligations meet the same or higher requirements as found in Subsections 16.40.130 D.– H. (.330 D.-H., .430 F.-H., .630 F.-H.), and only if the public safety and well-being is not endangered thereby. The adequacy of proposed alternative insurance coverage is [sic] shall be approved by the City Attorney’s Office before such alternative insurance may become effective.
49. “Alternatives to Insurance”. In determining whether alternative forms of insurance adequately protect the public safety and well-being, any insurance company issuing insurance policies pursuant to the provisions in Chapter 16.40 who are rated by A.M. Best Company and do not carry at least a rating of A.M. Best A- or better shall meet all of the following alternative requirements:
1. Be an insurer licensed and admitted to sell insurance policies in the State of Oregon and protected under the Oregon Insurance Guaranty Association (OIGA) with access to guaranty funds provided by the Oregon Guaranty Association Act (ORS 734.510, et seq.).
2. Have adequate balance sheet strength and ability to meet ongoing obligations to policyholders as demonstrated by Net Required Capital to support the financial risks of the company associated with the exposure of assets and underwriting to adverse economic and market conditions. The balance sheet strength shall be evaluated using A.M. Best Company’s universal Best Capital Adequacy Ratio (BCAR) model. To demonstrate adequate balance sheet strength, an insurer must receive and maintain a universal BCAR score sufficient to support an A.M. Best Financial Strength Rating of A- or better.
3. Have reinsurance for the portion of its business subject to Chapter 16.40 provided by a carrier rated by A.M. Best and carry at least a rating of A.M. Best A- or better.
In accordance with Chapter 16.40, the adequacy of alternative forms of insurance is subject to review and approval of the City Attorney. The Regulatory Division may request from any company subject to Chapter 16.40 any information necessary to establish that the requirements of this Administrative Rule have been satisfied prior to approval of any alternative form of insurance. If such information is not provided, then such alternative form of insurance is not approved.
Amended by Director of Portland Bureau of Transportation September 1, 2016.
Adopted by Director of Portland Bureau of Transportation May 24, 2016.
Filed for inclusion in PPD May 24, 2016.