I
106TH CONGRESS
1ST SESSION
H. R. 1954
To regulate motor vehicle insurance activities to protect against retroactive
regulatory and legal action and to create fairness in ultimate insurer
laws and vicarious liability standards.
IN THE HOUSE OF REPRESENTATIVES
MAY 26, 1999
Mr. BRYANT (for himself, Mr. OXLEY, Mr. BURR of North Carolina, Mr.
LARGENT, Mr. SHADEGG, Mr. PICKERING, and Mr. COBURN) introduced
the following bill; which was referred to the Committee on Commerce
A BILL
To regulate motor vehicle insurance activities to protect
against retroactive regulatory and legal action and to
create fairness in ultimate insurer laws and vicarious
liability standards.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Rental Fairness Act of 1999’’.
(b) TABLE OF CONTENTS.—The table of contents for
this Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. No additional insurance commissioner authority created.
Sec. 3. Definitions.
TITLE I—REGULATION OF MOTOR VEHICLE RENTAL INSURANCE
AGENCY ACTIVITIES
Sec. 101. Findings and purposes.
Sec. 102. Standard of regulation for motor vehicle rentals.
Sec. 103. Sunset.
TITLE II—ULTIMATE INSURER AND VICARIOUS LIABILITY
FAIRNESS
Sec. 201. Findings and purposes.
Sec. 202. General fairness and responsibility rule.
Sec. 203. State minimum financial responsibility laws for motor vehicles.
Sec. 204. Applicability and effective date.
SEC. 2. NO ADDITIONAL INSURANCE COMMISSIONER AU-
THORITY CREATED.
This Act shall not create any new authority for a
State insurance commissioner or other appropriate insur-
ance regulator of such State to issue a regulation, order,
or other statutorily authorized interpretation or action
governing the provisions of this Act except in accordance
with the relevant State insurance law.
SEC. 3. DEFINITIONS.
For purposes of this Act:
(1) CLAIMANT.—The term ‘‘claimant’’ means
any person who brings a civil action for any theory
of harm caused by a motor vehicle or the use of a
motor vehicle and any person on whose behalf such
an action is brought.
(2) HARM.—The term ‘‘harm’’ means any phys-
ical injury, illness, disease, or death or damage to
property caused by a motor vehicle.
(3) MOTOR VEHICLE.—The term ‘‘motor vehi-
cle’’ shall have the meaning given to this term under
section 13102(14) of title 49, United States Code.
(4) OWNER.—The term ‘‘owner’’ means—
(A) a person who is a record or beneficial
owner or long-term lessee of a motor vehicle;
(B) a person entitled to the use and pos-
session of a motor vehicle subject to a security
interest in another person; or
(C) a lessee or bailee of a motor vehicle, in
the trade or business of renting or leasing
motor vehicles, having the use or possession
thereof under a lease, bailment, or otherwise.
(5) PERSON.—The term ‘‘person’’ means any
individual, corporation, company, limited liability
company, trust, association, firm, partnership, soci-
ety, joint stock company, or any other entity (includ-
ing any governmental entity).
TITLE 
I—REGULATION 
OF
MOTOR VEHICLE RENTAL IN-
SURANCE 
AGENCY 
ACTIVI-
TIES
SEC. 101. FINDINGS AND PURPOSES.
The Congress finds that—
(1) State regulation of insurance continues to
be in the public interest, as affirmed by the
McCarran-Ferguson Act;
(2) where States have laws which regulate the
business of insurance, those State laws should not be
invalidated, impaired, or superseded by any con-
struction of a Federal Act of Congress unless such
Act specifically relates to the business of insurance;
(3) for those States which have not yet imple-
mented regulations explicitly governing the sale of
short term insurance offered with the rental of a
motor vehicle, it may be appropriate to prohibit
third-parties from enforcing on a retroactive basis
general licensure requirements against those who so-
licit the purchase of or sell such insurance; and
(4) many States are now considering such legis-
lation and the relief against such actions offered by
this title should thus expire once the States have
had a reasonable opportunity to consider appropriate
legislation.
SEC. 102. STANDARD OF REGULATION FOR MOTOR VEHI-
CLE RENTALS.
(a) PROTECTION AGAINST THE RETROACTIVE APPLI-
CATION OF REGULATORY AND LEGAL ACTION.—Except
as required by subsection (b), it shall be presumed that
SEC. 103. SUNSET.
This title shall expire 3 years after the date of its
enactment.
TITLE 
II—ULTIMATE 
INSURER
AND 
VICARIOUS 
LIABILITY
FAIRNESS
SEC. 201. FINDINGS AND PURPOSES.
The Congress finds that—
(1) the vast majority of State statutes and com-
mon law follow the generally accepted principle of
law that a party should be held liable only for harm
that the party could guard against;
(2) a small number of State common laws and
statutes still do not recognize this accepted principle
of law, and continue to subject companies that rent
or lease motor vehicles to vicarious liability for the
negligence of their rental customers in operating the
motor vehicle simply because of the company’s own-
ership, even where the rental company has not been
negligent in any way and the motor vehicle operated
perfectly;
(3) an even smaller minority of State laws con-
tinue to force companies that rent or lease motor ve-
hicles into the role of an ultimate insurer, imposing
unlimited potential liability on the companies for the
tortious acts of their customers, without regard to
fault; and
(4) these small number of vicarious liability and
ultimate insurer laws impose a disproportionate and
undue burden on interstate commerce by increasing
rental rates for all customers across the Nation, and
furthermore, pose a significant competitive barrier to
entry for smaller companies attempting to compete
in these markets, in contravention of the funda-
mental legal principle of fairness prohibiting liability
without fault.
SEC. 202. GENERAL FAIRNESS AND RESPONSIBILITY RULE.
No person engaged in the business of renting or leas-
ing a motor vehicle shall be placed in the position of an
ultimate insurer of its rental customers, or the occupants
of its rental vehicles, or be liable to a claimant for the
tortious act of another solely by reason of being an owner
of such motor vehicle.
SEC. 203. STATE MINIMUM FINANCIAL RESPONSIBILITY
LAWS FOR MOTOR VEHICLES.
Nothing in this title shall relieve any person engaged
in the business of renting or leasing a motor vehicle from
the obligation to comply with a State’s minimum financial
responsibility or insurance statute or regulations imposed
by that State for the privilege of registering and operating
a motor vehicle within that State.
SEC. 204. APPLICABILITY AND EFFECTIVE DATE.
Notwithstanding any other provision of law, this title
shall apply with respect to any action commenced on or
after the date of enactment of this title without regard
to whether the harm that is the subject of the action or
the conduct that caused the harm occurred before such
date of enactment.
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