[Federal Register Volume 74, Number 110 (Wednesday, June 10, 2009)]
[Proposed Rules]
[Pages 27485-27493]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-13581]


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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

49 CFR Part 387

[Docket No. FMCSA-2006-26262]
RIN 2126-AB05


Minimum Levels of Financial Responsibility for Motor Carriers

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of proposed rulemaking (NPRM); request for comments.

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SUMMARY: The Federal Motor Carrier Safety Administration (FMCSA) 
proposes amendments to its regulations concerning minimum levels of 
financial responsibility for motor carriers to allow Canada-domiciled 
carriers to maintain, as acceptable evidence of financial 
responsibility, insurance policies issued by Canadian insurance 
companies legally authorized to issue such policies in the Canadian 
Province or Territory where the motor carrier has its principal place 
of business. Currently, Canada-domiciled motor carriers operating in 
the U.S. must maintain as evidence of financial responsibility, 
insurance policies issued by U.S. insurance companies. The proposed 
change would not affect the required minimum levels of financial 
responsibility that carriers must now maintain under the regulations. 
This action is in response to a petition for rulemaking filed by the 
Government of Canada.

DATES: Public comments are requested on all aspects of this proposed 
rule by August 10, 2009.

ADDRESSES: You may submit comments identified by Docket No. FMCSA-2006-
26262 and/or RIN 2126-AB05, by any of the following methods--Internet, 
facsimile, regular mail, or hand-deliver.
    <bullet> Federal eRulemaking Portal: Federal Docket Management 
System (FDMS) Web site at http://www.regulations.gov. The FDMS is the 
preferred method for submitting comments, and we urge you to use it. In 
the Comment or Submission section, type Docket ID Number ``FMCSA-2006-
26262'', select ``Go'', and then click on ``Send a Comment or 
Submission.'' You will receive a tracking number when you submit a 
comment.
    <bullet> Mail, Courier, or Hand-Deliver: U.S. Department of 
Transportation, Docket Operations (M-30), West Building Ground Floor, 
Room W12-140, 1200 New Jersey Avenue, SE., Washington, DC 20590. Office 
hours are between 9 a.m. and 5 p.m., ET, Monday through Friday, except 
Federal holidays.
    <bullet> Fax: (202) 493-2251.
    <bullet> Docket: Comments and material received from the public, as 
well as background information and documents mentioned in this 
preamble, are part of docket FMCSA-2006-26262, and are available for 
inspection and copying on the Internet at http://www.regulations.gov. 
You may also view and copy documents at the U.S. Department of 
Transportation's, Docket Operations Unit, West Building Ground Floor, 
Room W12-140, 1200 New Jersey Ave SE., Washington, DC.
    Privacy Act: All comments will be posted without change including 
any personal information provided to the Federal Docket Management 
System (FDMS) at http://www.regulations.gov. Anyone can search the 
electronic form of all our dockets in FDMS, by the name of the 
individual submitting the comment (or signing the comment, if submitted 
on behalf of an association, business, labor union, etc.). The DOT's 
complete Privacy Act Statement was published in the Federal Register on 
April 11, 2000 (65 FR 19476), and can be viewed at http://docketsinfo.dot.gov.

FOR FURTHER INFORMATION CONTACT: Mr. Thomas Yager, Chief, FMCSA Driver 
and Carrier Operations. Telephone (202) 366-4325 or e-mail 
<a href="/cdn-cgi/l/email-protection#bff2fcefecfbffdbd0cb91d8d0c9"><span class="__cf_email__" data-cfemail="64292734372024000b104a030b12">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: 

Legal Basis for the Rulemaking

    Section 30 of the Motor Carrier Act of 1980 (1980 Act) (Pub. L. 96-
296, 94 Stat. 793, 820, July 1, 1980) authorized the Secretary of 
Transportation (Secretary) to prescribe regulations establishing 
minimum levels of financial responsibility covering public liability, 
property damage, and environmental restoration for the transportation 
of property for compensation by motor vehicles in interstate or foreign 
commerce. Section 30(c) of the 1980 Act provided that motor carrier 
financial responsibility may be established by evidence of one or a 
combination of the following if acceptable to the Secretary: (1) 
Insurance; (2) a guarantee; (3) a surety bond issued by a bonding 
company authorized to do business in the United States; and (4) 
qualification as a self-insurer (49 U.S.C. 31139(f)(1)). Section 30(c) 
required the Secretary to establish, by regulation, methods and 
procedures to assure compliance with these requirements.
    In June 1981, the Secretary issued regulations implementing section 
30, which are codified at 49 CFR part 387, subpart A. The Form MCS-90

[[Page 27486]]

endorsement for motor carriers transporting property is entitled 
``Endorsement for Motor Carrier Policies of Insurance for Public 
Liability Under Sections 29 and 30 of the Motor Carrier Act of 1980.'' 
(See 49 CFR 387.15.)
    Section 18 of the Bus Regulatory Reform Act of 1982 (Bus Act) (Pub. 
L. 97-261, 96 Stat. 1102, 1120, September 20, 1982) directed the 
Secretary to prescribe regulations establishing minimum levels of 
financial responsibility covering public liability and property damage 
for the transportation of passengers for compensation by motor vehicle 
in interstate or foreign commerce. Section 18(d) of the Bus Act 
provided that such motor carrier financial responsibility may be 
established by evidence of one or a combination of the following if 
acceptable to the Secretary: (1) Insurance, including high self-
retention; (2) a guarantee; and (3) a surety bond issued by a bonding 
company authorized to do business in the United States (49 U.S.C. 
31138(c)(1)). Section 18(d) required the Secretary to establish, by 
regulation, methods and procedures to assure compliance with these 
requirements.
    In November 1983, the Secretary issued regulations implementing 
section 18 of the Bus Act. The regulations implementing that law are 
found at 49 CFR part 387, subpart B. The Form MCS-90B endorsement for 
for-hire motor carriers of passengers is entitled ``Endorsement for 
Motor Carrier Policies of Insurance for Public Liability Under Section 
18 of the Bus Regulatory Reform Act of 1982.'' (See 49 CFR 387.39.)
    This notice of proposed rulemaking (NPRM) is based on the 
Secretary's authority to establish methods and procedures to ensure 
that certain motor carriers of property and passengers maintain the 
minimum financial responsibility liability coverage mandated by 49 
U.S.C. 31138(c)(1) and 31139(f)(1). This authority was delegated to 
FMCSA by the Secretary pursuant to 49 CFR 1.73(f).

Background

The Government of Canada (Canada) Petition for Rulemaking

    On September 29, 2005, Canada submitted a petition for rulemaking 
to amend 49 CFR part 387. Canada specifically requested that FMCSA 
amend Sec.  387.11, which provides that a policy of insurance or surety 
bond does not satisfy FMCSA's financial responsibility requirements 
unless the insurer or surety furnishing the policy or bond is--

    (a) Legally authorized to issue such policies or bonds in each 
State in which the motor carrier operates; or
    (b) Legally authorized to issue such policies or bonds in the 
State in which the motor carrier has its principal place of business 
or domicile, and is willing to designate a person 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 in any State in which the motor carrier operates; or
    (c) Legally authorized to issue such policies or bonds in any 
State of the United States and eligible as an excess or surplus 
lines insurer in any State in which business is written, and is 
willing to designate a person 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 in 
any State in which the motor carrier operates.

    Canada asked FMCSA to consider amending this provision to permit 
insurance companies, licensed either provincially or Federally in 
Canada, to write motor vehicle liability insurance policies for Canada-
domiciled motor carriers of property operating in the U.S. and to issue 
the Form MCS-90 endorsement for public liability to meet FMCSA's 
financial responsibility requirements. Form MCS-90 is the endorsement 
for motor carrier policies of insurance for public liability, which 
for-hire motor carriers of property must maintain at their principal 
place of business. Motor carriers domiciled in Canada and Mexico must 
also carry a copy of the Form MCS-90 on board each vehicle operated in 
the United States.
    At present, the combined effects of Sec. Sec.  387.7 and 387.11 
require Canada-domiciled motor carriers of property operating in the 
United States to either: (1) Obtain insurance through a Canada-licensed 
insurer, which enters into a ``fronting agreement'' with a U.S.-
licensed insurer, whereby the U.S. insurer permits the Canadian insurer 
to sign the Form MCS-90 as its agent, and the entire risk is 
contractually ``reinsured'' back to the Canadian insurer by the U.S. 
insurer; or (2) obtain two separate insurance policies, one valid in 
Canada written by a Canadian insurer and one valid in the United States 
written by a U.S. insurer. Canada indicates that the first option is by 
far the most common. It suggests that the result of these requirements 
is an additional administrative burden, inconvenience, and cost not 
faced by U.S.-domiciled motor carriers operating into Canada. FMCSA 
estimates there are approximately 9,000 Canada-domiciled for-hire motor 
carriers of property and passengers and freight forwarders actively 
operating commercial motor vehicles (CMVs) in the United States that 
are subject to the current financial responsibility rules.
    Canada requested that FMCSA amend 49 CFR part 387 so that an 
insurance policy issued by a Canadian insurance company satisfies the 
financial responsibility requirements. The insurance company must be 
legally authorized to issue such a policy in the Province or Territory 
of Canada in which the Canadian motor carrier has its principal place 
of business or domicile. The company must also be willing to designate 
a person 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 in any State in which the motor 
carrier operates.
    Canada's proposal, if adopted through this rulemaking, would 
eliminate the need for Canadian insurance companies to link with a U.S. 
insurance company to legally insure Canadian motor carriers of property 
that operate in the United States. It should be noted that although 
Canada's petition only seeks to amend 49 CFR 387.11, its proposal 
necessarily implicates other sections of part 387, which would need to 
be changed for the sake of consistency. Section 387.35 applies the 
Sec.  387.11 requirements to motor passenger carriers, which must 
obtain a Form MCS-90B endorsement. Furthermore, Sec.  387.315 imposes 
the same requirements on motor carriers who must file evidence of 
insurance with FMCSA, and Sec.  387.409 applies similar financial 
responsibility requirements on freight forwarders. Therefore, FMCSA 
proposes to amend those sections for consistency.
    Canada explained that, for many years, it has recognized and 
accepted non-commercial motor vehicle liability policies issued in 
either country as acceptable proof of financial responsibility. All 
jurisdictions in Canada accept the signing and filing of a Power of 
Attorney and Undertaking (PAU) by U.S.-licensed insurers as valid proof 
of financial responsibility for U.S.-domiciled motor vehicles of all 
categories. In essence, the PAU provides that the U.S. insurer will 
comply with and meet the minimum coverage and policy limits required in 
any Canadian jurisdiction in which a crash involving its insured 
occurs. The PAU is similar to FMCSA's requirements under Sec. Sec.  
387.11 and 387.15 (MCS-90 Form).

[[Page 27487]]

The Security and Prosperity Partnership of North America

    The Security and Prosperity Partnership of North America (SPP) is 
an effort to increase security and enhance prosperity among the Untied 
States, Canada, and Mexico through greater cooperation and information 
sharing. The President of the United States, the Prime Minister of 
Canada, and the President of Mexico (the Leaders) announced this 
initiative on March 23, 2005. Among other things, the initiative 
reflects the goal of improving the availability and affordability of 
insurance coverage for motor carriers engaged in cross-border commerce 
in North America.
    On June 27, 2005, a Report to the Leaders was signed on behalf of 
the United States by the Secretaries of Homeland Security, Commerce, 
and State. See http://www.spp.gov, and click on link to ``2005 Report 
to Leaders.'' One of the Prosperity Priorities of the SPP is to ``Seek 
ways to improve the availability and affordability of insurance 
coverage for carriers engaged in cross-border commerce in North 
America.'' At http://www.spp-psp.gc.ca/progress/prosperity_08_06-en.aspx, the following key milestone is stated for this initiative:

    ``U.S. and Canada to work towards possible amendment of the U.S. 
Federal Motor Carrier Safety Administration Regulation to allow 
Canadian insurers to directly sign the MCS-90 form concerning 
endorsement for motor carrier policies of insurance for public 
liability: by June 2006.''

    Canada advocates a change to part 387 to assist in meeting the 
stated goals of the SPP. Achieving a seamless motor vehicle liability 
insurance policy between Canada and the United States for motor 
carriers would contribute to enhancing the competitive and efficient 
position of North American businesses. FMCSA recognized the importance 
of considering these requests and granted the petition by initiating a 
rulemaking proceeding to solicit public comment on Canada's proposal.

Advance Notice of Proposed Rulemaking

    On December 15, 2006 (71 FR 75433), FMCSA published an advance 
notice of proposed rulemaking (ANPRM) in response to Canada's petition 
for rulemaking to amend 49 CFR part 387. The ANPRM also requested 
public comment on a petition for rulemaking from the Property Casualty 
Insurers of America (PCI) which requested that FMCSA make revisions to 
the Forms MCS-90 and MCS-90B endorsements to clarify that language in 
the endorsements imposing liability for negligence ``on any route or in 
any territory authorized to be served by the insured or elsewhere'' 
does not include liability connected with transportation within Mexico.
    The PCI petition was the result of a Federal District Court 
decision holding that the Form MCS-90B endorsement applied to a crash 
that occurred in Mexico. As a result, PCI requested that the 
endorsement be amended by inserting the phrase: ``Within the United 
States of America, its territories, possessions, Puerto Rico, and 
Canada'' following the words ``or elsewhere.''
    However, in September 2007, the U.S. Court of Appeals for the Fifth 
Circuit issued a decision, Lincoln General Ins. Co. v. De La Luz 
Garcia, 501 F.3d 436 (5th Cir., 2007), effectively overturning the 
District Court decision that had prompted PCI to file its petition. 
Because the Court of Appeals decision essentially provided PCI with the 
relief requested in its petition, and because the issues raised in that 
petition are different from the issues raised in Canada's petition, 
FMCSA has decided that a regulatory change need not be considered at 
this time, and this issue will not be addressed further in this NPRM.

Discussion of the Comments Received on the ANPRM

    FMCSA received comments on the ANPRM from the following parties: 
The American Insurance Association (AIA), the Insurance Bureau of 
Canada (IBC), the Canadian Trucking Alliance (CTA), the Holland America 
Line, Inc. (HAL), the National Association of Professional Surplus 
Lines Offices, Ltd. (NAPSLO), and the Public Utilities Commission of 
Ohio (PUCO). The Canadian Government and the Property Casualty Insurers 
of America submitted supplemental comments.
    Generally, the commenters agree with the amendments requested by 
Canada. For example, AIA believes that ``* * * granting [Canada's] 
petition is in the public interest.'' HAL believes that whatever rules 
FMCSA adopts the Agency should apply the rules to both motor carriers 
of property and motor carriers of passengers.
    One commenter opposed the granting of the petition. NAPSLO 
expressed concerns that changes to the regulations may expose U.S. 
carriers and motorists to ``a potential increase in risk in connection 
with foreign carriers.''

Specific Concerns Raised by Commenters

    NAPSLO argues there is already a process for Canadian companies to 
do business in the U.S. NAPSLO states:

    The [National Association of Insurance Commissioners (NAIC)] has 
adopted a streamlined application process for foreign companies in 
its International Insurance Department [(IID)]. Through the 
application process, the Canadian companies would become approved 
surplus lines insurers, and thus, meet the existing criteria. By 
obtaining approval from the NAIC's IID, a Canadian carrier would 
become approved as a surplus lines writer in the vast majority of 
states. The reason for this process is to streamline the approval 
process. A Canadian insurer could become approved in the vast 
majority of states through a single application process. The other 
states have an established process for alien insurance companies 
desiring to operate in their states. Thus, there is a long 
established process for alien companies intending to operate in the 
U.S.

    Although not opposed to the Canada petition for rulemaking, PUCO 
believes FMCSA should ensure that policies of insurance maintained by 
foreign motor carriers operating in the United States are as ``reliable 
and comprehensive'' as those currently required. PUCO emphasizes that 
the enforceability of the rules must be seamless and efficient.
    FMCSA Response:
    FMCSA acknowledges the commenters' concerns but does not, however, 
believe maintaining the status quo is appropriate or necessary to 
ensure financial protection for U.S. citizens in the event of a crash 
involving a Canada-domiciled motor carrier.
    Currently, Canada-domiciled carriers have two options for 
satisfying the U.S. insurance requirements. The first is to obtain two 
separate insurance policies, one with a Canadian insurance company for 
its operations in Canada and the other with a U.S. insurance company 
for its operations in the U.S. The second option is to obtain insurance 
from a Canadian insurer under contract with a U.S. insurer through a 
fronting arrangement. Both options result in the imposition of costs on 
Canada-based motor carriers that are significantly greater than the 
costs for U.S.-based carriers operating in Canada. FMCSA estimates that 
this rulemaking would result in discounted net benefits of 
approximately $273 million over a 10-year period, or $30,000 for each 
Canada-based motor carrier that conducts operations in the U.S. during 
this period. As noted above, there are approximately 9,000 such 
carriers.
    While the approach that NAPSLO supports may provide a solution, it 
would require each Canadian insurance

[[Page 27488]]

company to essentially seek authority from State insurance 
commissioners to issue policies in the U.S. Based on the information 
provided by NAPSLO it is not clear that this approach would necessarily 
provide the needed coverage for Canada-domiciled carriers in each State 
in which the insured Canadian carrier intends to operate in the U.S. if 
the NAIC's IID is not recognized in certain States.
    FMCSA believes the proposed rulemaking is needed to provide 
reciprocity between the U.S. and Canada and that it is inappropriate to 
impose on Canada-based carriers and insurance companies requirements 
that Canada does not impose on U.S.-based motor carriers and insurance 
companies.
    Under the current fronting arrangements between U.S. and Canadian 
insurance companies, Canadian insurance companies are under contract to 
pay claims against public liability policies that include the Form MCS-
90/MCS-90B endorsement executed by a U.S. insurance company. The fact 
that the fronting arrangements exist is an indication that there are 
sufficient legal processes in place to assure U.S. insurance companies 
that their Canadian counterparts could be forced to honor their 
contractual obligations in the event that the Canadian insurance 
company attempted to avoid paying a claim for a crash that occurred in 
the U.S. The continued use of these fronting arrangements over the 
years also suggests that Canadian insurers typically honor their 
contractual obligations without the need for legal actions--it is 
unlikely that U.S. insurance companies would continue to sign such 
arrangements if the Canadian insurance companies they were dealing with 
exhibited a reluctance to honor their commitments. Therefore, FMCSA 
believes the experience U.S. insurance companies have had with Canadian 
insurance companies through fronting arrangements serves as proof 
Canadian insurers have the financial ability and the corporate values 
to honor their commitments without the need for legal action. The only 
apparent need for the current fronting arrangements is to fulfill 
FMCSA's insurance requirements, not because of problems obtaining 
payments from Canadian insurance companies.
    With regard to PUCO's comments, FMCSA believes that the regulatory 
change sought by Canada would not compromise the financial protection 
provided under the current insurance regime. The legal processes 
between the U.S. and Canada that support the fronting arrangements, 
combined with the demonstrated willingness of Canadian insurance 
companies to honor their financial obligations, suggests there will 
continue to be financial protection for U.S. citizens who file claims 
following a crash involving a commercial motor vehicle operated by a 
Canada-domiciled motor carrier insured by a Canadian insurance company.

Discussion of Response to Specific Questions Included in the ANPRM

    FMCSA specifically requested that comments provide responses to 
questions and issues raised in the ANPRM. The questions and the 
responsive comments are set out below.
    Question 1:

    <bullet> What has been the experience in collecting damage 
claims filed with Canadian insurance companies for incidents that 
occur in the United States, particularly as it relates to motorists 
or other claimants for crashes involving passenger cars driven in 
the United States but insured by Canadian firms?

    Comments (IBC and Canada): Canada and IBC indicated that U.S. 
citizens and businesses that file claims against the drivers of 
passenger cars insured by Canadian insurers receive the same quality of 
claims service and settlement as from U.S. insurance companies. Both 
stated that they were not aware of any cases where legitimate damage 
claims involving passenger cars driven in the U.S. and insured by 
Canadian insurance companies were not paid to U.S. citizens or 
businesses.
    FMCSA Response:
    The comments suggest that claims involving Canada-domiciled 
carriers would be honored by Canadian insurers. Although the commenters 
discuss current experiences involving passenger cars operating under a 
substantially lower threshold of financial responsibility than motor 
carriers are required to maintain, the full cooperation of Canadian 
insurers in these matters is a good indicator that the insurers would 
provide comparable levels of cooperation in the event claims are filed 
by U.S. citizens.
    In addition, the on-going practice of fronting arrangements between 
U.S. insurers and Canadian insurers provides a strong indicator that 
Canadian insurance companies are fully capable of providing the 
required levels of financial responsibility for Canada-domiciled motor 
carriers operating in the U.S. It is unlikely that U.S. insurers would 
take financial risks of entering into a fronting agreement with 
Canadian insurers without some assurances that the Canadian insurance 
companies are willing and able to pay claims.
    Question 2:

    <bullet> How does Canada's consumer protection system ensure 
that claims filed by U.S. citizens and businesses receive proper 
consideration?

    Comments (IBC): The IBC stated that legal and regulatory insurance 
systems in Canada require that a Canadian insurance company that issues 
an automobile insurance policy respond to a claim arising from an 
incident in Canada or in the U.S. The Canadian provincial and 
territorial Superintendents of Insurance are responsible under their 
respective insurance laws for the market conduct of all insurers 
licensed in their jurisdictions. Market conduct includes the fair and 
prompt settlement of claims.
    FMCSA Response:
    FMCSA agrees with IBC that Canada's requirements for automobile 
insurance provide protection for U.S. citizens in the event of an 
automobile crash. Based on the information available to FMCSA and 
included in the docket referenced at the beginning of this notice, 
there is no indication that Canadian insurance companies would be non-
responsive to claims filed by U.S. citizens or businesses against 
Canadian-domiciled carriers. As indicated above, Canadian insurance 
companies currently honor their commitments under their fronting 
agreements with U.S. insurance companies and there is no reason to 
conclude that these companies would be less likely to honor claims 
filed directly with them.
    FMCSA is engaged in an on-going process with its Canadian 
counterparts to identify opportunities for establishing reciprocity 
arrangements, whenever practicable, concerning certain motor carrier 
requirements. Based upon the information currently available and the 
comments to the ANPRM, the Agency has preliminarily determined that the 
Canadian processes for providing consumer protection in the event of a 
crash between a commercial vehicle and a passenger car are comparable 
to what is provided in the U.S. We believe U.S. entities would have 
their claims processed in a timely manner in the event they obtain a 
final judgment against a Canadian-insured, Canada-domiciled motor 
carrier in a U.S. court.
    Question 3:

    <bullet> Would it be more difficult to execute a U.S. court 
judgment against a Canadian motor carrier insured by a Canadian 
insurance company, as compared to a Canadian motor carrier insured 
by a U.S. insurance company?

    Comments (IBC): The IBC believes it would not be more difficult 
because Canadian insurers, as a normal business

[[Page 27489]]

practice, pay U.S. judgments against their policyholders. In insuring 
Canadian motor carriers which operate in the U.S., Canadian insurance 
companies know the insurance product they are selling to these motor 
carriers includes a promise to pay U.S. judgments. IBC is not aware of 
any instance where a Canadian-licensed insurer has refused or failed to 
pay a judgment against its Canadian policy holder to a U.S. citizen, to 
the full extent of its legal obligation.
    FMCSA Response:
    FMCSA agrees with IBC that Canadian insurers, as a normal business 
practice, pay U.S. judgments against their policy holders. The Agency 
is not aware of any instances in which a U.S. insurance company, 
operating in a fronting arrangement with a Canadian insurance company, 
has experienced problems with a Canadian partner fulfilling its 
financial obligations to satisfy judgments against a Canada-domiciled 
motor carrier. The extensive experience that U.S. insurers have had in 
working with Canadian insurers provides significant assurance that in 
the event of a judgment against a Canada-domiciled carrier, the 
Canadian insurer will pay, up to the applicable limits on the Form MCS-
90 or MCS-90B, any legitimate claims filed by U.S. citizens or 
businesses.
    Question 4:

    <bullet> Under Canadian law, would Canadian insurance companies 
be legally bound to make payment to U.S. claimants based on a final 
judgment issued by a U.S. court?

    Comments (IBC): The IBC stated that a Canadian insurance company 
would be legally bound to make payments to U.S. claimants based on a 
final judgment issued by a U.S. court. It points out that legislation 
pertaining to automobile insurance in each of Canada's provinces and 
territories provides that coverage under automobile insurance policies 
is provided when the vehicle is in Canada or the United States or while 
being transported between those countries. It is therefore clear from 
this wording of this legislation that it is intended that the liability 
coverage under a Canadian automobile insurance policy will cover 
crashes in the U.S.
    FMCSA Response:
    FMCSA believes that fronting arrangements between U.S. and Canadian 
insurance companies would not exist unless there were sufficient legal 
processes to ensure that U.S. insurance companies could take action to 
receive payment from any Canadian company that refused to honor its 
contractual obligations. While the specific legal processes to ensure 
that Canadian insurance companies honor their contractual obligations 
may differ from the legal processes that would be used by a U.S. entity 
filing a claim directly against a Canadian insurance policy, the track 
record of Canadian insurance companies does not suggest that U.S. 
entities would need to resort to legal actions to have their claims 
honored. Canadian insurance companies have been working cooperatively 
with U.S. insurance companies for years and there is no reason to 
believe that the Canadian companies would adopt new practices to avoid 
paying claims if this rulemaking proceeds.
    Question 5:

    <bullet> If Canadian insurance companies were allowed to write 
coverage for Canadian motor carriers operating in the United States, 
would there likely be economic impacts associated with a potential 
increase in unpaid claims?

    Comments (IBC): The only change FMCSA is proposing would be the 
name of the insurance company that signs the endorsement for Form MCS-
90 or Form MCS-90B. There would be no change in the payment of claims 
because there would be no change in which insurance company has the 
contractual obligation to pay claims. IBC does not foresee an increase 
in unpaid claims, and it does not anticipate adverse economic impacts 
on U.S. entities.
    FMCSA Response:
    FMCSA does not believe there would be an increased likelihood of 
unpaid claims if Canada-domiciled carriers operating in the U.S. are 
allowed to operate under insurance policies issued by Canadian 
companies. The Forms MCS-90 and MCS-90B require that the insurer pay 
any final judgment against the motor carrier. Therefore, if there is a 
court decision against a Canada-domiciled motor carrier concerning a 
commercial motor vehicle crash, the Canadian insurer must pay the 
claim. Canadian insurance companies, through fronting arrangements 
described above, are currently fulfilling the financial obligations 
associated with satisfying U.S. judgments against Canada-domiciled 
carriers. There is no reason to believe that they would be financially 
unable to, or refuse to fulfill their financial obligations if they 
execute the Forms MCS-90 or MCS-90B as the insurer rather than as an 
agent of a U.S. insurer.
    Question 6:

    <bullet> Although the petition proposes amending only Sec.  
387.11, is there any reason why the rulemaking should not be 
extended to include insurance policies issued to Canadian passenger 
carriers and freight forwarders?

    Comments (CTA, HAL, AIA, and IBC): Generally, the commenters 
support including Canadian passenger carriers and freight forwarders in 
the proposed changes.
    FMCSA Response:
    FMCSA agrees with commenters that the rulemaking should not be 
limited to insurance for motor carriers of property. Accordingly, this 
proposal would permit Canada-domiciled motor carriers of passengers and 
freight forwarders to operate in the U.S. under insurance policies 
issued by Canadian insurance companies.

The Proposed Rule

    FMCSA proposes amendments to 49 CFR 387.11 to allow Canadian 
insurance companies, licensed in the province or territory where the 
motor carrier has its principal place of business, to issue proof of 
financial responsibility for Canada-domiciled motor carriers by 
executing the Forms MCS-90 and MCS-90B directly rather than as the 
agent of a U.S. insurer. FMCSA also proposes amendments to other 
sections of part 387 to ensure consistency within part 387. These 
include Sec.  387.35, which applies the requirements of Sec.  387.11 to 
motor passenger carriers; Sec.  387.315, which imposes the same 
requirements on motor carriers that must file evidence of insurance 
with FMCSA; and 49 CFR 387.409, which applies these requirements to 
freight forwarders.
    In order to implement this proposal, FMCSA proposes to revise 
Sec. Sec.  387.11 and 387.35 to add a new paragraph (d), that would 
allow an insurance policy to satisfy the financial responsibility 
requirements of the subpart if the insurer is:

    <bullet> Legally authorized to issue a policy of insurance in 
the Province or Territory of Canada in which a motor carrier has its 
principal place of business or domicile, and is willing to designate 
a person 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 brought in any State in which the motor 
carrier operates.

    The Agency would also revise Sec.  387.315 to add a new paragraph 
(d) that would allow a certificate of insurance to be accepted by FMCSA 
if issued by an insurance company that is authorized to issue insurance 
policies:

    <bullet> In the Province or Territory of Canada in which a motor 
carrier has its principal place of business or domicile, and will 
designate in writing upon request by FMCSA, a person upon whom 
process, issued by or under the authority of a court of competent 
jurisdiction, may be served in any proceeding at law brought in any 
State in which the carrier operates.


[[Page 27490]]


    The Agency would also revise Sec.  387.409 to add a new paragraph 
(d) that would allow a certificate of insurance to be accepted by FMCSA 
if issued by an insurance company that is authorized to issue insurance 
policies:

    (d) In the Province or Territory of Canada in which a freight 
forwarder has its principal place of business or domicile, and will 
designate in writing upon request by FMCSA, a person upon whom 
process, issued by or under the authority of a court of competent 
jurisdiction, may be served in any proceeding at law brought in any 
State in which the freight forwarder operates.

    The conforming amendments to part 387 would enable Canadian 
insurers to execute the Forms MCS-90 and MCS-90B endorsements, and 
allow Canadian insurers to file certificates of insurance required 
under part 387, to protect the public and to ensure that anyone injured 
or killed by a Canada-domiciled motor carrier is compensated after a 
claim is filed. In the event that the matter requires court action to 
determine fault in the crash, the payment would typically be made after 
a settlement agreement is reached, or a U.S. claimant receives a final 
judgment issued by a U.S. court against the Canada-domiciled motor 
carrier. Filing of the FMCSA insurance forms and endorsements by 
Canadian insurers would subject Canada-domiciled motor carriers to all 
applicable Federal laws and regulations that require minimum levels of 
financial responsibility to cover public liability and property damage 
for the transportation by commercial motor vehicle in the U.S.

Methods and Databases (Technologies) for Ensuring the Validity of 
Canadian Insurers

    Before an insurance company can submit certificates of insurance or 
other evidence of financial security to the FMCSA, it must first be 
assigned a filer account number. The account number is also used to 
bill a service fee to the insurance companies ($10 fee for each 
filing).
    For example, procedures for assigning a Canadian insurance company 
an account filer number would include the following:
    <bullet> The Canadian insurance company must submit a request to 
FMCSA in writing to open a filer account. The letter must include the 
home office address of the insurance company. FMCSA will also need a 
billing address if the address is different from the home office 
address, the name of a contact person within that insurance company, 
their telephone number, e-mail address and fax number.
    <bullet> The Canadian insurance company must provide a copy of its 
license to write insurance policies.
    <bullet> FMCSA staff will verify with the Canadian Government point 
of contact whether the Canadian insurance company is licensed or 
admitted in Canada to write insurance policies for Canadian motor 
carriers.
    After all the above information is received, FMCSA will then assign 
the Canadian insurance company a filer account number.
    If the proposed rule is implemented, Canadian insurers would sign 
the Forms MCS-90 and MCS-90B, including any other form or documentation 
required under part 387 to be filed on behalf of motor carriers, 
thereby satisfying the minimum public liability requirements of FMCSA. 
Canada's Department of Finance has indicated that Canadian insurers are 
all monitored for financial solvency by Provincial or Federal insurance 
regulators, and the regulator can provide FMCSA with a short statement 
confirming that the Canadian insurer seeking to sign the MCS-90 form, 
or any other security authorized by part 387, is supervised for 
financial solvency. A Canadian agency would: (a) Respond to 
verification requests on demand when an insurer new to FMCSA seeks to 
sign the MCS-90 form and all other MCS and BMC insurance forms required 
by part 387; (b) on an annual basis, verify a list of Canadian insurers 
that have signed the MCS-90 form and all other MCS and BMC forms 
required by part 387 to ensure that the list is still accurate; and (c) 
respond to re-verification requests on demand if there were a specific 
concern (for example, a news article on the financial health of a 
particular company). Canadian insurers would also assume responsibility 
for insurance filings on behalf of their clients as a result of this 
rulemaking.

Approaches Considered

    After reviewing the comments received in response to the ANPRM, 
FMCSA considered two options: (1) Issue a proposed rule to amend part 
387 to allow Canadian insurance companies to issue insurance policies 
for Canada-domiciled carriers and freight forwarders, and (2) maintain 
the status quo which would entail withdrawal of the ANPRM. The Agency 
chose the option of publishing an NPRM amending part 387, including 
changes to Sec. Sec.  387.11, 387.35, 387.315, and 387.409 to ensure 
consistency throughout part 387 for the insurance requirements for 
motor carriers of property and passengers and freight forwarders. Based 
on the comments received, there was no discernible adverse impact on 
U.S. entities that would likely result from proceeding with an NPRM, as 
requested by the Canadian government in its petition.

Costs and Benefits of the Proposed Rule

Regulatory Impact Analyses

    In examining the economic impact of this rulemaking, FMCSA 
considered two options: (1) The Agency's proposed amendments to 49 CFR 
Part 387 that would permit Canadian insurance companies to issue 
insurance policies for Canada-domiciled carriers and freight forwarders 
operating CMVs in the U.S., and (2) the Agency's alternative of 
maintaining the status quo which would entail withdrawal of the ANPRM. 
Under the first option, FMCSA decided to include within the scope of 
the proposal active Canada-domiciled for-hire motor carriers of 
property and passengers and freight forwarders. It is assumed that a 
small proportion of Canada-domiciled motor carriers and freight 
forwarders may elect to continue with the status quo, at least in the 
short term, and choose not to seek direct insurance representation by a 
Canadian insurance company for their U.S. operations. Those carriers 
and freight forwarders are assumed to be a negligible percentage of the 
total affected entities and are thus not considered in the analysis.
    The RIA examines the direct costs of implementing the proposed rule 
in terms of administrative costs incurred by the FMCSA and in forgone 
revenue by U.S. insurance companies (of which there are approximately 
five) currently representing Canadian motor carriers and freight 
forwarders. In addition, the RIA examines the functional impact of rule 
compliance under this option from the perspectives of the FMCSA's 
Enforcement and Compliance Division and the Canadian motor carriers.
    Under the second option, the same population of Canadian motor 
carriers is considered. The RIA examines the direct costs of 
maintaining the status quo, which consist mainly of compliance costs 
currently incurred by Canadian motor carriers. The RIA specifically 
analyzes the comparative cost burden currently being borne by Canadian 
motor carriers versus that currently being borne by U.S. motor 
carriers. FMCSA will continue to seek information to refine its 
estimates of the cost burden. FMCSA specifically requests comments from 
U.S. insurers on these cost issues. Any additional information will be 
included in the docket referenced at the beginning of this notice.

[[Page 27491]]

    FMCSA notes that cost information used in its analyses was obtained 
from the Agency's data base, Canada Finance, the American Insurance 
Association, the Property Casualty Insurers Association of America and 
publicly available information.
    The RIA also examines the benefits of this rulemaking which are 
largely the relief of a disproportional cost and administrative burden 
and inconvenience currently being borne by Canada-domiciled motor 
carriers in comparison to their U.S. counterparts. Other benefits 
include the elimination of trade barriers (i.e., disproportionate cost 
burden) in accordance with the goals of the North American Free Trade 
Agreement (NAFTA), and increased cooperation among the U.S. and Canada 
pursuant to the Security and Prosperity Partnership (SPP) of North 
America.
    This analysis is conducted under the assumption that there are 
approximately 9,000 \1\ active Canada-domiciled motor carriers and 
freight forwarders conducting CMV operations in the U.S. The FMCSA 
Licensing and Insurance (L&I) system provides up-to-date information 
about authorized for-hire motor carriers who must register with FMCSA 
under 49 U.S.C. Sec. Sec.  13901 and 13902. The L&I database was the 
primary database utilized in the analysis because it does not include 
overlapping carrier data. Under MCMIS, a motor carrier may have 
multiple carrier classifications and thus may be counted more than 
once. The Agency did, however, use MCMIS as a source to obtain the 
number of Canada-domiciled for-hire carriers exempt from registration 
under 49 U.S.C. 13901 and 13902 since they are not found in the L&I 
database.
---------------------------------------------------------------------------

    \1\ Licensing and Insurance database, at http://li-public.fmcsa.dot.gov, and the Motor Carrier Management Information 
System (MCMIS) database, at http://MCMIS.fmcsa.dot.gov, as of 
February 20, 2009.
---------------------------------------------------------------------------

    The RIA finds that the proposed rulemaking yields a positive 
discounted net benefit of $273 million estimated over a 10-year period. 
This amounts to approximately $30,000 per carrier over that period. 
These quantified net benefits accrue to the Canada-domiciled for-hire 
motor carriers and freight forwarders which are impacted by this 
rulemaking, of which there are approximately 9,000 actively operating 
CMVs in the U.S. The essential impact of this rulemaking would be the 
relief of a disproportional cost burden which, in turn, is the expected 
net benefit of approximately $273 million over a 10-year period.

Rulemaking Analyses and Notices

Executive Order 12866 (Regulatory Planning and Review) and DOT 
Regulatory Policies and Procedures

    For purposes of Executive Order 12866 (Regulatory Planning and 
Review) and DOT Regulatory Policies and Procedures (44 FR 11034, 
February 26, 1979), FMCSA has made a preliminary determination that 
this action is not a significant regulatory action within the meaning 
of that Executive Order from an economic standpoint or otherwise. While 
the Agency estimates a positive discounted net benefit of approximately 
$273 million over a 10-year period, the net benefits are for Canada-
domiciled motor carriers. Because the benefits pertain to foreign 
entities, they are not considered for the purposes of determining 
whether the rulemaking is significant under Executive Order 12866. 
Therefore, the Agency has determined this action is not an economically 
significant regulatory action under section 3(f), Regulatory Planning 
and Review, because it would not have an annual effect on the United 
States' economy of $100 million.
    FMCSA acknowledges that U.S. insurance companies would experience a 
reduction in revenues because they would no longer receive payments for 
the fronting arrangements with Canadian insurance companies. However, 
the Agency believes that a significant portion of the payments they 
received from Canadian insurance companies were used to offset the 
legal and administrative costs the U.S. companies incurred to 
participate in the fronting arrangement. Although there may be some 
degree of financial loss to U.S. companies, the amount of the loss is 
expected to be small, as evidenced by the fact that, except for NAPSLO, 
the U.S. insurance industry has not expressed opposition to Canada's 
petition. FMCSA requests comments on this issue.
    A full regulatory evaluation has been prepared in support of this 
rulemaking. The regulatory evaluation is included in the docket 
referenced at the beginning of this notice.

Regulatory Flexibility Act

    FMCSA has considered whether this rulemaking action would have a 
significant impact under the Regulatory Flexibility Act (5 U.S.C. 601-
612), as amended by the Small Business Regulatory Enforcement and 
Fairness Act (RFA) (Pub. L. 104-121), and has preliminarily determined 
this action would not have a significant economic impact on a 
substantial number of small entities.

Executive Order 13132 (Federalism)

    This proposed action has been analyzed in accordance with the 
principles and criteria contained in Executive Order 13132 (64 FR 
43255, August 10, 1999). E.O. 13132 does not require a Federalism 
assessment under any circumstances. We have determined that this 
proposed action would not affect the States' ability to discharge 
traditional State government functions.

International Trade and Investment

    The Trade Agreement Act of 1979 (19 U.S.C. 2531-2533) prohibits 
Federal agencies from establishing standards that create unnecessary 
obstacles to the foreign commerce of the United States. Legitimate 
domestic objectives such as safety are not considered unnecessary 
obstacles. In developing rules, the Trade Act requires agencies to 
consider international standards and where appropriate, that they be 
the basis of U.S. standards. FMCSA has assessed the potential effect of 
the proposed rule and determined that that the expected economic impact 
of this rule is minimal and should not affect trade opportunities for 
U.S. firms doing business in Canada or for Canadian firms doing 
business in the United States.

Unfunded Mandates Reform Act of 1995

    The Unfunded Mandates Reform Act of 1995 (Public Law 104-4; 2 
U.S.C. 1532) requires each agency to assess the effects of its 
regulatory actions on State, local, and tribal governments and the 
private sector. Any agency promulgating a final rule likely to result 
in a Federal mandate requiring expenditures by a State, local, or 
tribal government, or by the private sector of $136.1 million or more 
in any one year, must prepare a written statement incorporating various 
assessments, estimates, and descriptions that are delineated in the 
Act. FMCSA has preliminarily determined that this proposal would not 
have an impact of $136.1 million or more in any one year.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3520), a 
Federal agency must obtain approval from the Office of Management and 
Budget for each collection of information it conducts, sponsors, or 
requires through regulations. FMCSA has determined this action would 
not have an impact on OMB Control Number 2126-0008, ``Financial 
Responsibility for Motor Carriers of Passengers and Motor Carriers of 
Property,'' an information

[[Page 27492]]

collection burden which is currently approved at 4,529 annual burden 
hours per year through March 31, 2010.

National Environmental Policy Act

    The Agency analyzed this proposed rule for the purpose of the 
National Environmental Policy Act of 1969 (NEPA) (42 U.S.C. 4321 et 
seq.), the Council on Environmental Quality Regulations Implementing 
NEPA (40 CFR parts 1500 to 1508), and FMCSA's NEPA Implementation Order 
5610.1 (issued on March 1, 2004, 69 FR 9680). This action is 
categorically excluded (CE) from further environmental documentation 
under Appendix 2.6.v. of Order 5610.1, which contain categorical 
exclusions for regulations prescribing the minimum levels of financial 
responsibility required to be maintained by motor carriers operating in 
interstate, foreign, or intrastate commerce. In addition, FMCSA 
believes the proposed action would not involve extraordinary 
circumstances that would affect the quality of the environment. Thus, 
the proposed action does not require an environmental assessment or an 
environmental impact statement.
    We have also analyzed this proposed rule under the Clean Air Act 
(CAA), as amended, section 176(c), (42 U.S.C. 7401 et seq.) and 
implementing regulations promulgated by the Environmental Protection 
Agency. Approval of this proposed action is exempt from the CAA's 
general conformity requirement since it involves policy development and 
civil enforcement activities, such as investigations, inspections, 
examinations, and the training of law enforcement personnel. See 40 CFR 
93.153(c)(2). It would not result in any emissions increase or result 
in emissions that are above the general conformity rule's de minimis 
emission threshold levels, because the action merely relates to 
insurance coverage across international borders between the U.S. and 
Canada.

Environmental Justice

    FMCSA has considered the environmental effects of this proposed 
rule in accordance with Executive Order 12898 and DOT Order 5610.2 on 
addressing Environmental Justice for Minority Populations and Low-
Income Populations, published April 15, 1997 (62 FR 18377) and has 
preliminarily determined that there are no environmental justice issues 
associated with this proposed rule nor any collective environmental 
impact resulting from its promulgation. Environmental justice issues 
would be raised if there were ``disproportionate'' and ``high and 
adverse impact'' on minority or low-income populations. None of the 
regulatory alternatives considered in this proposed rulemaking would 
result in high and adverse environmental impacts.

Executive Order 12630 (Taking of Private Property)

    The Agency has analyzed this proposed rule under Executive Order 
12630, Governmental Actions and Interference with Constitutionally 
Protected Property Rights. We do not anticipate that this proposed 
action would effect a taking of private property or otherwise have 
implications under Executive Order 12630.

Executive Order 12372 (Intergovernmental Review)

    The regulations implementing Executive Order 12372 regarding 
intergovernmental consultation on Federal programs and activities do 
not apply to this proposed rule.

Executive Order 13211 (Energy Supply, Distribution, or Use)

    FMCSA has analyzed this proposed action under Executive Order 
13211, Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use. The Agency has preliminarily determined 
that it is not a significant energy action within the meaning of 
section 4(b) of the Executive Order and would not likely have a 
significant adverse effect on the supply, distribution, or use of 
energy. Therefore, the Agency would not anticipate that a Statement of 
Energy Effects would be required.

Executive Order 12988 (Civil Justice Reform)

    FMCSA has preliminarily determined that this proposed rulemaking 
meets applicable standards in sections 3(a) and 3(b)(2) of Executive 
Order 12988, Civil Justice Reform, to minimize litigation, eliminate 
ambiguity, and reduce burden.

Privacy Impact Assessment

    FMCSA conducted a privacy impact assessment of this proposed rule 
as required by section 522(a)(5) of the Transportation, Treasury, 
Independent Agencies, and General Government Appropriations Act, 2005, 
Public Law 108-447, div. H, 118 Stat. 2809, 3268, (December 8, 2004) 
[set out as a note to 5 U.S.C. 552a]. The assessment considers any 
impacts of the proposed rule on the privacy of information in an 
identifiable form and related matters. FMCSA has preliminarily 
determined this proposal contains no privacy impacts.

Executive Order 13045 (Protection of Children)

    FMCSA has analyzed this proposal under Executive Order 13045, 
entitled ``Protection of Children from Environmental Health Risks and 
Safety Risks.'' The Agency has preliminarily determined that this 
proposed rulemaking would not cause any environmental risk to health or 
safety that may disproportionately affect children.

Executive Order 13175 (Tribal Consultation)

    FMCSA has analyzed this action under Executive Order 13175, dated 
November 6, 2000, and has preliminarily determined that the proposed 
action would not have substantial direct effects on one or more Indian 
tribes; would not impose substantial compliance costs on Indian tribal 
governments; and would not preempt tribal law. Therefore, a tribal 
summary impact statement would not be required.

List of Subjects in 49 CFR Part 387

    Buses, Freight, Freight forwarders, Hazardous materials 
transportation, Highway safety, Insurance, Intergovernmental relations, 
Motor carriers, Motor vehicle safety, Moving of household goods, 
Penalties, Reporting and recordkeeping requirements, Surety bonds.

    For the reasons discussed above, FMCSA proposes to amend title 49, 
Code of Federal Regulations, chapter III, subchapter B, as set forth 
below:

PART 387--MINIMUM LEVELS OF FINANCIAL RESPONSIBILITY FOR MOTOR 
CARRIERS

    1. The authority citation for part 387 continues to read as 
follows:

    Authority:  49 U.S.C. 13101, 13301, 13906, 14701, 31138, and 
31139; and 49 CFR 1.73.

    2. In Sec.  387.11:
    a. In paragraph (c), in the last line, remove the period at the end 
of the sentence, and add in its place ``; or''; and
    b. Add paragraph (d) to read as follows:


Sec.  387.11  State authority and designation of agent.

* * * * *
    (d) A Canadian insurance company legally authorized to issue a 
policy of insurance in the Province or Territory of Canada in which a 
Canadian motor carrier has its principal place of

[[Page 27493]]

business or domicile, and that is willing to designate a person 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 brought in any State in which the motor carrier operates.
    3. In Sec.  387.35:
    a. In paragraph (c), in the last line, remove the period at the end 
of the sentence, and add in its place ``; or''; and
    b. Add paragraph (d) to read as follows:


Sec.  387.35   State authority and designation of agent.

* * * * *
    (d) A Canadian insurance company legally authorized to issue a 
policy of insurance in the Province or Territory of Canada in which a 
Canadian motor carrier has its principal place of business or domicile, 
and that is willing to designate a person 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 brought in any State in 
which the motor carrier operates.
    4. In Sec.  387.315:
    a. In paragraph (c), in the last line, remove the period at the end 
of the sentence, and add in its place ``; or''; and
    b. Add paragraph (d) to read as follows:


Sec.  387.315  Insurance and surety companies.

* * * * *
    (d) In the Province or Territory of Canada in which a Canadian 
motor carrier has its principal place of business or domicile, and will 
designate in writing upon request by FMCSA, a person upon whom process, 
issued by or under the authority of a court of competent jurisdiction, 
may be served in any proceeding at law brought in any State in which 
the carrier operates.
    5. In Sec.  387.409:
    a. In paragraph (c), in the last line, remove the period at the end 
of the sentence, and add in its place ``; or''; and
    b. Add paragraph (d) to read as follows:


Sec.  387.409  Insurance and surety companies.

* * * * *
    (d) In the Province or Territory of Canada in which a Canadian 
freight forwarder has its principal place of business or domicile, and 
will designate in writing upon request by FMCSA, a person upon whom 
process, issued by or under the authority of a court of competent 
jurisdiction, may be served in any proceeding at law brought in any 
State in which the freight forwarder operates.

    Issued on: June 4, 2009.
Rose A. McMurray,
Acting Deputy Administrator.
[FR Doc. E9-13581 Filed 6-9-09; 8:45 am]
BILLING CODE 4910-EX-P


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