XC / -TK^i t:/2> t» <*/76 INTERSTATE COMMERCE COMMISSI < RULES AND REGULA GOVERNING THE FILING OF SURETY BOMi ICATES OF INSURANCE, QUALIFICATIONS AS A SELF- INSURER OR OTHER SECURITIES AND AGREEMENTS BY MOTOR CARRIERS AND BROKERS SUBJECT TO PART II OF THE INTERSTATE COMMERCE ACT REVISED JULY 1, 1960 U.S. DEPOSITORY UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1960 For sale by the Superintendent of Documents, U.S. Government Printing Office Washington 25, D.C. - Price 10 cents INTERSTATE COMMERCE COMMISSION RULES AND REGULATIONS GOVERNING THE FILING OF SURETY BONDS, CER- TIFICATES OF INSURANCE, QUALIFICATIONS AS A SELF-INSURER OR OTHER SECURITIES AND AGREEMENTS BY MOTOR CARRIERS AND BROKERS SUBJECT TO PART H OF THE INTERSTATE COMMERCE ACT Sections 211 ( c ) and 215 of the Interstate Commerce Act Sec. 211(c). The Commission shall prescribe reasonable rules and regulations for the protection of travelers or shippers by motor vehicle, to be observed by any person holding a brokerage license, and no such license shall be issued or remain in force unless such person shall have furnished a bond or other security approved by the Commission, in such form and amount as will insure financial responsibility and the supplying of authorized transportation in accordance with contracts, agreements, or arrangements therefor. Sec. 215. No certificate or permit shall be issued to a motor carrier or remain in force, unless such carrier complies with such reasonable rules and regulations as the Commission shall prescribe governing the filing and approval of surety bonds, policies of insurance, qualifica- tions as a self-insurer or other securities or agreements, in such rea- sonable amount as the Commission may require, conditioned to pay, within the amount of such surety bonds, policies of insurance, quali- fications as a self-insurer or other securities or agreements, any final judgment recovered against such motor carrier for bodily injuries to or the death of any person resulting from the negligent operation, maintenance, or use of motor vehicles under such certificate or permit, or for loss or damage to property of others. The Commission, may, in its discretion and under such rules and regulations as it shall prescribe, require any such common carrier to file a surety bond, policies of insurance, qualifications as a self-insurer, or other securities or agree- ments, in a sum to be determined by the Commission, to be conditioned upon such carrier making compensation to shippers and/or con- signees for all property belonging to shippers and/or consignees, and coming into the possession of such carrier in connection with its trans- portation service. Any carrier which may be required by law to com- pensate a shipper and/or consignee for any loss, damage, or default for which a connecting motor common carrier is legally responsible 1 54999S— 60 2 INTERSTATE COMMERCE COMMISSION shall be subrogated to the rights of such shipper and/or consignee under any such bond, policies of insurance, or other securities or agree- ments, to the extent of the sum so paid. The Commission may prescribe, with respect to motor carriers operating within the United States in the course of engaging in transportation between places in a foreign country or between a place in one foreign country and a place in another foreign country, such reasonable regulations concerning security for the protection of the public as the Commission is authorized, by this section, to prescribe for other motor carriers. TITLE 49— TRANSPORTATION CHAPTER I — Interstate Commerce Commission SUBCHAPTER B— CARRIERS BY MOTOR VEHICLES Part 174 — Surety Bonds and Policies of Insurance EX PARTE NO. MC 5 In the Matter of Security for the Protection of the Public as Provided in Part II of the Interstate Commerce Act, and of rules and regulations governing filing of surety bonds, certificates of insurance, qualifications as a self-insurer, or other securities and agreements by motor carriers and brokers subject to part II of the Interstate Commerce Act. Sec. 174.1 Surety bond, certificate oi insurance or other securities. (a) Property damage ; public liability. (b) Common carriers — cargo insurance; exempt com- modities. (c) Carriers partially exempt ; leased rights. (d) Continuing compliance required. 174.2 Insurance, minimum amounts. (a) Motor carriers; bodily injury liability, property damage liability. (b) Motor common carriers; cargo liability. 174.3 Combination vehicles. 174.4 Brokers. 174.5 Qualifications. (a) As a self -insurer. (b) Other securities or agreements. 174.6 Bonds and certificates of insurance. 174.7 Forms and procedure. (a) Forms of endorsements, cancellation notices, etc. (b) Filing of certificates of insurance and cancella- tion notices, etc. (c) Name of insured. (d) Cancellation notice. (e) Termination by replacement. 3 4 INTERSTATE COMMERCE COMMISSION Sec. 174.8 Insurance and surety companies ; authorized. ( a ) State authority and designation of agent. (b) Financial resources. 174.9 Refusal to accept, or revocation by Commission of surety bond, etc. 174.10 Fiduciaries. (a) Insured and principal denned. (b) Insurance coverage in behalf of fiduciaries to apply concurrently. 174.11 Operations in foreign commerce. (Authority : 49 Stat. 546 as amended, 49 U.S.C. 304— Interpret or apply 49 Stat. 554 as amended 557, 49 U.S.C. 311, 315) § 174.1 Surety bond, certificate of insurance, or other securities. (a) Property damage; public liability. Except as provided in para- graph (c) of this section, no common or contract carrier subject to part II of the Interstate Commerce Act shall engage in interstate or foreign commerce, and no certificate or permit shall be issued to such a carrier or remain in force unless and until there shall have been filed with and accepted by the Commission a surety bond, certificate of in- surance, proof of qualifications as a self-insurer, or other securities or agreements, in the amounts prescribed in section 174.2, conditioned to pay any final judgment recovered against such motor carrier for bodily injuries to or the death of any person resulting from the negligent operation, maintenance or use of motor vehicles in trans- portation subject to part II, Interstate Commerce Act, or for loss of or damage to property of others. (b) Common carriers — cargo insurance; exempt commodities. Ex- cept as provided in paragraph (c) of this section, no common carrier by motor vehicle subject to part II of the Interstate Commerce Act shall engage in interstate or foreign commerce, nor shall any certificate be issued to such a carrier or remain in force unless and until there shall have been filed with and accepted by the Commission a surety bond, certificate of insurance, proof of qualifications as a self-insurer, or other securities or agreements in the amounts prescribed in section 174.2, conditioned upon such carrier making compensation to shippers or consignees for all property belonging to shippers or consignees and coming into the possession of such carrier in connection with its trans- portation service ; Provided, that the requirements of this paragraph shall not apply in connection with the transportation of the following commodities : RULES AND REGULATIONS Ashes, wood or coal. Bituminous concrete (also known as blacktop or amosite), including mixtures of asphalt paving. Cement, dry, in containers or in bulk. Cement building blocks. Cinders, coal. Coal. Coke. Commercial fertilizer. Corn cobs. Cottonseed hulls. Fish scrap. Forest products ; viz : Logs, billets, or bolts, native wood, Canadian wood or Mexican pine; pulpwood, fuel wood, wood kindling; and wood sawdust or shavings (shingle tow) other than jewelers' or paraffined. Garbage. Gravel, other than bird gravel. Ice. Iron ore. Lime and limestone. Lumber. Manure. Meat scraps. Ores in bulk, including ore concentrates. Peat moss. Poles and piling, other than totem poles. Salt, in bulk or in bags. Sand, other than asbestos, bird, iron, monazite, processed, or tobacco sand. Scrap iron. Scrap steel. Shells, clam, mussel or oyster. Slag, other than slag with commercial value for the further extraction of metals. Slate, crushed or scrap. Soil, earth or marl, other than infusorial, diatomaceous, tripoli, or inoculated soil or earth. Stone, unglazed and unmanufactured, including ground agricultural limestone. Sugar beet pulp. Sugar beets. Water, other than mineral or prepared water. b INTERSTATE COMMERCE COMMISSION Wrecked or disabled motor vehicles. Other materials or commodities, of low value, upon specific application to and approval by the Commission. (c) Carriers partially exempt; leased rights. The requirements of paragraphs (a) and (b) of this section shall not apply to motor car- rier operations partially exempt from regulation by sections 202(c) and 203 (b) (49 U.S.C. 302 (c) and 303 (b) ) , or to motor carriers which have, with the approval of the Commission, leased their entire oper- ating rights to others, but only so long as the lessee of such rights, with the approval of the Commission, continues such operations. Lessors may not resume operations unless and until full compliance is effected. (d) Continuing compliance required. Such security as is accepted by the Commission in accordance with the requirements of sections 211(c) and 215 of part II, Interstate Commerce Act, shall remain in effect at all times. § 174.2 Insurance, minimum amounts. The minimum amounts re- ferred to in section 174.1 are hereby prescribed as follows : (a) Motor carriers; bodily injury liability, property damage liability. (1) (2) (3) Limit for bodily (4) injuries to or Limit for Limit for death of all loss or bodily persons injured damage in injuries or killed in any any one Kind of equipment to or one accident accident death (subject to a to property of one maximum of of others person $25,000 for (excluding bodily injuries cargo) to or death of one person) Passenger equipment (seating capacity): 7 passengers or less . $25, 000 $100, 000 $10, 000 8 to 12 passengers, inclusive _ _- 25, 000 150, 000 10, 000 13 to 20 passengers, inclusive. _ . _ _ 25, 000 200, 000 10, 000 21 to 30 passengers, inclusive 25, 000 250, 000 10, 000 31 passengers or more.. - 25, 000 300, 000 10, 000 Freight equipment: All motor vehicles used in the transporta- tion of property.. .. .. 25, 000 100, 000 10,000 (b) Motor common carriers; cargo liability. Security required to compensate shippers or consignees for loss of or damage to property belonging to shippers or consignees and coming into the possession of motor common carriers in connection with their transportation service, (1) for loss of or damage to property carried on any one motor vehicle — $1,000; (2) for loss of or damage to or aggregate of losses or damages of or to property occurring at any one time and place— $2,000. RULES AND REGULATIONS 7 § 174.3 Combination vehicles. The following combinations will be regarded as one motor vehicle for purposes of these rules: (1) a tractor and trailer or semi-trailer when the tractor is engaged solely in drawing the trailer or semi-trailer, and (2) a truck and trailer when both together bear a single load. § 174.4 Brokers. No person, firm or corporation shall engage in the business of a broker as defined in part II, Interstate Commerce Act, and no brokerage license shall be issued to any such person, firm or corporation nor remain in force unless and until such person, firm or corporation shall have furnished a bond or other security approved by the Commission in an amount of not less than $5,000, and in such form as will insure the financial responsibility of such broker and the supptying of authorized transportation in accordance with the contracts, agreements, or arrangements therefor. § 174.5 Qualifications, (a) As a self-insurer. The Commission will give consideration to and will approve the application of a motor carrier to qualify as a self-insurer if such carrier furnishes a true and accurate statement of its financial condition and other evidence which will establish to the satisfaction of the Commission the ability of such motor carrier to satisfy its obligations for bodily injury liability, property damage liability, or cargo liability without affecting the stability or permanency of the business of such motor carrier. (b) Other securities or agreements. The Commission will also con- sider applications for approval of other securities or agreements and will approve any such applications if satisfied that the security or agreement offered will afford the security for the protection of the public contemplated by sections 211 (c) and 215 of part II, Interstate Commerce Act. § 174.6 Bonds and certificates of insurance. Each certificate of insurance or surety bond filed with the Commission must be for the full limits of liability required under these sections, Provided, that only corporations or companies approved by the Commission may qualify to act as surety. § 174.7 Forms and procedure, (a) Forms of endorsements, can- cellation notices, etc. Endorsements for policies of insurance, and surety bonds, certificates of insurance, applications to qualify as a self-insurer, or for approval of other securities or agreements, and notices of cancellation must be in the form prescribed and approved by the Commission. Surety bonds and certificates of insurance shall specify that coverage thereunder will remain in effect continuously until terminated as herein provided, except that in special or unusual circumstances special permission may be obtained for filing certificates of insurance or surety bonds covering periods of less than twelve months duration. 8 INTERSTATE COMMERCE COMMISSION (b) Filing of certificates of insurance and cancellation notices, etc. Certificates of insurance, surety bonds, and notices of cancellation must be filed with the Commission in triplicate. (c) Name of insured. Certificates of insurance and surety bonds shall be issued in the full and correct name of the individual, partner- ship, corporation or other person to whom the certificate, permit, or license is, or is to be, issued. In the case of a partnership all partners shall be named. (d) Cancellation notice. Except as provided in paragraph (e) of this section, surety bonds, certificates of insurance and other securities or agreements shall not be cancelled or withdrawn until after thirty (30) days' notice in writing by the insurance company, surety or sureties, motor carrier, broker or other party thereto, as the case may be, has first been given to the Commission at its office in Washington, D.C., which period of thirty (30) days shall commence to run from the date such notice is actually received at the office of the Commission. (e) Termination by replacement. Certificates of insurance or surety bonds which have been accepted by the Commission under these rules may be replaced by other certificates of insurance, surety bonds or other security, and the liability of the retiring insurer or surety under such certificates of insurance or surety bonds shall be considered as having terminated as of the effective date of the replacement certificate of insurance, surety bond or other security, Provided the said replace- ment certificate, bond or other security meets all of the following conditions: (1) it must be acceptable to the Commission under these rules and regulations; (2) it must be accompanied by a letter of authorization, in duplicate, signed by the motor carrier involved or an authorized employee of such motor carrier, authorizing such re- placement and verifying the effective date thereof; and (3) its effec- tive date must coincide with the effective date specified in the letter of authorization and the said date may not be more than thirty days prior to the date of receipt by the Commission of the letter of authorization and replacement certificate. § 174.8 Insurance and surety companies ; authorized, (a) State authority and designation of agent. No certificate of insurance or surety bond will be accepted by the Commission under these sections unless written or issued by an insurance or surety company legally authorized to issue policies of the type indicated by such certificate or surety bond, as the case may be, in each State in which the motor carrier is authorized to operate under part II of the Interstate Com- merce Act and such company fully complies with paragraph (b) of this section ; Provided, however, that in lieu of the licensing require- ment with respect to any State except that in which the motor carrier has its principal place of business or domicile the company may file RULES AND REGULATIONS 9 with the Commission a designation in writing of the name and post office address of a person in each such State upon whom process issued by or under the authority of any court having jurisdiction of the subject matter may be served in any proceeding at law or equity brought against such company. Such designation may from time to time be changed by like designation similarly filed, but shall be main- tained during the effectiveness of any certificate of insurance or surety bond issued by the company, and thereafter with respect to any claims arising during the effectiveness of such certificate or bond. (b) Financial resources. Each insurance and surety company must possess and maintain surplus funds (policyholders' surplus) of not less than $500,000, which minimum will be determined on the basis of the values of assets and liabilities as show T n in its financial statements filed with and approved by the insurance department or other in- surance regulatory authority of the State of domicile (home State) of such company, except in instances where, in the judgment of the Com- mission, additional evidence with respect to such values is considered necessary; Provided, hotvever, That this subsection shall be effective December 31, 1960, as respects insurance and surety companies which are, on June 30, 1957, authorized to file certificates of insurance and surety bonds with the Commission. § 174.9 Refusal to accept, or revocation by Commission of surety bond, etc. The Commission may, at any time refuse to accept or may revoke its acceptance of any surety bond, certificate of insurance, qualifications as a self-insurer, or other securities or agreements if, in its judgment such security does not comply with these sections or for any reason fails to provide satisfactory or adequate protection for the public. Revocation of acceptance of any certificate of in- surance, surety bond, or other security shall not relieve the motor carrier from compliance with section 174.1(d) of these rules and regulations. § 174.10 Fiduciaries, (a) Insured and principal defined. The terms "insured" and "principal" as used in certificates of insurance, surety bonds and notices of cancellation filed by or in behalf of motor carriers under these sections shall be construed to include not only the motor carrier named in the certificate, surety bond or notice of can- cellation, but also the fiduciary of such motor carrier as defined in section 179.3 of this chapter — Transfers of Operating Rights. The coverage of fiduciaries herein provided for shall attach at the moment of succession of such fiduciaries. (b) Insurance coverage in behalf of fiduciaries to apply concur- rently. The coverage furnished under the provisions of this section on behalf of fiduciaries shall not apply subsequent to the effective date of other insurance, or other security, filed with and approved by the UNIVERSITY OF FLORIDA 10 INTERSTATE COMMERCE ( 3*262 088S4 4613 Commission in behalf of such fiduciaries. After the coverage pro- vided in this section shall have been in effect thirty (30) days, it may be canceled or withdrawn within the succeeding period of thirty (30) days by the insurer, the insured, the surety, or the principal upon ten (10) days' notice in writing to the Commission at its office in Washington, D.C., which period of ten (10) days shall commence to run from the date such notice is actually received by the Commission. After such coverage has been in effect for a total of sixty (60) days, it may be canceled or withdrawn only in accordance with section 174.7 of these rules and regulations. § 174.11 Operations in foreign commerce. No motor carrier may operate in the United States in the course of transportation between places in a foreign country or between a place in one foreign country and a place in another foreign country unless and until there shall have been filed with and accepted by the Commission a certificate of insurance, surety bond, proof of qualifications as a self-insurer, or other securities or agreements in the amount prescribed in section 174.2(a), conditioned to pay any final judgment recovered against such motor carrier for bodily injuries to or the death of any person resulting from the negligent operation, maintenance, or use of motor vehicles in transportation between places in a foreign country or be- tween a place in one foreign country and a place in another foreign country, insofar as such transportation takes place in the United States, or for loss of or damage to property of others. The security for the protection of the public required by this section shall be maintained in effect at all times and shall be subject to the provisions of sections 174.5, 174.6, 174.7, 174.8, 174.9 and 174.10; Provided, that the requirements of section 174.8(a) shall be satisfied if the insurance or surety company, in addition to having been approved by this Com- mission, is legally authorized to issue policies or surety bonds in at least one of the States in the United States, or one of the Provinces in Canada, and has filed with this Commission the name and address of a person upon whom legal process may be served in each State in or through which the motor carrier operates. Such designation may from time to time be changed by like designation similarly filed, but shall be maintained during the effectiveness of any certificate of insurance or surety bond issued by the company, and thereafter with respect to any claims arising during the effectiveness of such certifi- cate or bond; and Provided further, that the term "motor carrier" as used in this section shall not include private carriers or carriers operating under the partial exemptions from regulation in sections 202(c) or 203(b) of the Interstate Commerce Act (49 U.S.C. 302(c) and 303(b)). o