INSPECTION RESULTS CONT. • What are the inspection results • Violations if any • Severity of violation • Out-of-service or not • Total severity during inspection • Time weight • 3X – Within 6 months • 2X – 6-12 months • 1X – Beyond 12 months 8/10/2016 Session Three WELWebCE 2016 38
INSPECTION RESULTS CONT. • The total of the inspections are then reflected in the CSA/SMS BASIC • Is the BASIC a reflection of a safe operation by the motor carrier? • FMCSA says “no”, but insurance providers deal with the results when underwriting and court cases • Depends on where operating – States differ • Scores were public until 12/15 – Now only “raw” information unless access to scores is from a third party provider 8/10/2016 Session Three WELWebCE 2016 39
8/10/2016 Session Three WELWebCE 2016 40
8/10/2016 Session Three WELWebCE 2016 41
RETAIL AGENTS • How do you use scores in the underwriting, acceptance and pricing of a motor carrier? • If you do not have access to scores, could you send in a submission without “checking” the scores? • Provider has some scores • How will the underwriter react? • Will it be less if you know and could explain how improvements are being made? • Or • If you can find out early and help insured improve before underwriter has to review • DOT enforcement officer intervention 8/10/2016 Session Three WELWebCE 2016 42
HOW SCORES ARE DEVELOPED • Absolute Score for each BASIC • The scores are then compared with other motor carriers in Safety Event Groups • The comparison is the percentage reflected and if it exceeds the threshold, a triangle 8/10/2016 Session Three WELWebCE 2016 43
8/10/2016 Session Three WELWebCE 2016 44
8/10/2016 Session Three WELWebCE 2016 45
ABSOLUTE SCORE • The “absolute score” or “measure” is not a peer comparison but a reflection of the individual motor carrier’s inspection results in five of the BASIC’s. This eliminates the problem with peer groups but the state variances remain. What is the absolute score? – A simplified description for all but Unsafe Driving is the total of each violation’s severity multiplied by its respective Time Weight divided by the total of the number of Relevant Inspections each multiplied by its respective Time Weight. 8/10/2016 Session Three WELWebCE 2016 46
ABSOLUTE SCORE CONT. • A Time Weight of 1, 2, or 3 is assigned to each applicable violation and each relevant inspection based on its age. Violations/inspections recorded in the past six months receive a Time Weight of 3. Violations/inspections recorded for six months and up to twelve months ago receive a Time Weight of 2. All violations/inspections recorded earlier (older than twelve months but within the past twenty-four months) receive a Time Weight of 1. This time-weighting places more emphasis on results of recent inspections relative to older inspections. The Time Weight is applied to all relevant inspections including those that do not result in a violation in the BASIC. A Time and Severity Weighted Violation is a violation’s severity weight multiplied by its Time Weight. 8/10/2016 Session Three WELWebCE 2016 47
ABSOLUTE SCORE CONT. Measure = (Total Time Weighted Severity Points) (Total Time Weighted Relevant Inspections) Let’s look at an imaginary motor carrier, Tom’s Trucking LLC who has four relevant inspections with two in the most current six months, one in the next six months and one older than a year: 2 x 3 = 6 1 x 2 = 2 1 x 1 = 1 9 9 becomes the denominator of that BASIC. 8/10/2016 Session Three WELWebCE 2016 48
ABSOLUTE SCORE CONT. • Now let’s look at the Vehicle Maintenance BASIC – Our imaginary motor carrier, Tom’s Trucking LLC, had inspections during the past twenty-four months that had violations for Vehicle Maintenance. In looking at March 2016 absolute scores, one of the inspections was in February 2016 for obstructed windshield which has a severity rating of 1. An inspection in December 2015 for no brakes as required had a severity rating of 4. An inspection in May 2015 for Inoperative required lamps which has a severity rating of 6 and no pre-trip inspection which has a severity rating of 4. The fourth inspection in December 2014 was for improper machinery securement with a severity rating of 1 8/10/2016 Session Three WELWebCE 2016 49
ABSOLUTE SCORE CONT. The total Time-Weighted Severity for Vehicle Maintenance used to calculate the VM absolute score in March 2016 would be: February 2016 severity of 1 x 3 = 3 December 2015 severity of 4 x 3 = 12 May 2015 severity of 10 x 2 = 20 December 2014 severity of 1 x 1 = 1 36 for a total Time Weighted severity for the Vehicle Maintenance BASIC in March 2016 of 36. To get the absolute score, you divide the 36 by the Total Time Weighted Relevant Inspections of 9: 36 ÷ 9 = 4.00 8/10/2016 Session Three WELWebCE 2016 50
THIRD PARTY VENDORS CAN HELP BY PROVIDING • “Estimated – Calculated” CSA scores in enhanced underwriting analyses • Monitoring to keep track of motor carrier safety data • Using roadside inspection and violation data • Approximate CSA scores can be calculated • Calculated scores can still be available • They have access to the “raw” data from FMCSA and have written programs to project the motor carrier scores • Will they be “exact”? – No – But close - Yes 8/10/2016 Session Three WELWebCE 2016 51
WHY USE A THIRD PARTY? • Saves time! • Time cost money! • Retail agents will not have information available that insurance providers will unless they develop an arrangement with a third party 8/10/2016 Session Three WELWebCE 2016 52
THIRD PARTY PROVIDERS • MCIEF Members • Central Analysis Bureau (CAB) • www.cabadvantage.com • Carrier Software • www.carriersoftware.com 8/10/2016 Session Three WELWebCE 2016 53
Using analytical reports to seek the direction of risk safety and stability: a. Understand the data b. Use the reports to inform yourself and your customer. 8/10/2016 Session Three WELWebCE 2016 54
IS CSA MISUSED? • A look beyond the triangle 8/10/2016 Session Three WELWebCE 2016 55
CONTINUING EDUCATION QUESTION • Triangles are hidden per Congress but: • A Still available • B Gone forever 8/10/2016 Session Three WELWebCE 2016 56
ADDITIONAL INFORMATION ON SMS 8/10/2016 Session Three WELWebCE 2016 57
8/10/2016 Session Three WELWebCE 2016 58
8/10/2016 Session Three WELWebCE 2016 59
8/10/2016 Session Three WELWebCE 2016 60
8/10/2016 Session Three WELWebCE 2016 61
8/10/2016 Session Three WELWebCE 2016 62
8/10/2016 Session Three WELWebCE 2016 63
CONTINUING EDUCATION QUESTION • When a DOT reported crash happens, the driver will be drug tested • A All crashes • B Only when at-fault • C Some but not all 8/10/2016 Session Three WELWebCE 2016 64
DRIVERS • Who screens? • How good? • How long with insured 8/10/2016 Session Three WELWebCE 2016 65
CONCERNS FOR WHO IS DRIVING A COMMERCIAL MOTOR VEHICLE (CMV) • By the motor carrier • Driver selection will affect: • Their safety rating • Ability to obtain • Insurance • Loads 8/10/2016 Session Three WELWebCE 2016 66
CONCERNS FOR WHO IS DRIVING A COMMERCIAL MOTOR VEHICLE (CMV) CONT. • By the FMCSA • The bad “actors” must be stopped from driving CMV’s • Carrier selection of new drivers • Monitoring of current drivers • By the insurance industry • Acceptance and pricing of insurance is based on the drivers the motor carrier selects 8/10/2016 Session Three WELWebCE 2016 67
DRIVER CONCERNS • The insurance industry (companies, wholesalers, retail agents) cannot provide MVR’s to their insureds! – When the MVR is used in employment – To hire, dismiss, promote or change of employment (job) • This is a session about motor carriers so most of your insureds have motor vehicles 26,001 GVW or larger – Drivers must have a CDL • Do all insureds have driver hiring standards? • How do the insurers know these standards? 8/10/2016 Session Three WELWebCE 2016 68
DRIVER CONCERNS CONT. • Can all insureds obtain insurance no matter how bad their drivers are? • The quality of their drivers affects their costs! • Do the insureds meet all the requirements for hiring DOT drivers? • If so, then they have to obtain their own employment MVR • Does the DOT care about drivers that the motor carrier uses? • CSA – More focus on their activities 8/10/2016 Session Three WELWebCE 2016 69
YOUR INSURED ASKS YOU ABOUT A DRIVER OR TO “ADD” A DRIVER TO THE POLICY • What is your reaction? • Good driver? • Bad driver? 8/10/2016 Session Three WELWebCE 2016 70
DO’S • Help insured establish driver hiring standards (yes, even small risks) • Advise the insured of the federal (DOT/CDL) hiring procedures and standards and review compliance • Advise insurance carrier of hiring standards and adherence • Encourage insured to reduce driver turnover • Obtain list of drivers from insured • Review and discuss any problems with insured (before submitting risk) 8/10/2016 Session Three WELWebCE 2016 71
DO NOT’S • Send MVR to insured • Approve a driver • Reject a driver • The hiring decision is the insured’s • The insurance industry’s decision is to either insure or not and at what price based on the hiring practices • Suggested communication • “We have reviewed your drivers (some, one, current proposed hire) and find him/her/them not within the agreed upon quality – Tell us how you intend to get back within the quality” 8/10/2016 Session Three WELWebCE 2016 72
CDL REQUIREMENTS – MOTOR CARRIER ACT OF 1986 • Who has to have a CDL? • All drivers of “Commercial Motor Vehicles” (CMV’s) • For-hire – But also private • Employers of drivers who operate CMV’s must make sure drivers have proper driver licenses or could be fined or held liable 8/10/2016 Session Three WELWebCE 2016 73
CDL REQUIREMENTS – MOTOR CARRIER ACT OF 1986 CONT. • What is a “CMV”? • Vehicles having a gross vehicle weight of 26,001 or more • Vehicles having a gross combination weight rating of 26,001 or more pounds inclusive of a towed unit with a GVW of more than 10,001 pounds • Passenger vehicles designed to carry more than 15 occupants including the driver • Vehicles that have to be placarded due to their hazardous lading • Exemptions • Ag – 150 air miles of starting point 8/10/2016 Session Three WELWebCE 2016 74
TESTING AND VERIFICATION • Complete application – Date of birth must be shown on application • Past three (3) years of employment must be shown and verified • 10/29/04 standards • New employer must verify information within first 30 days of employment – Make inquiries • Employment (who, how long?) • Accidents (preventable, mon-preventable) • Drug testing (refused or failed) • Confirmation – Previous employer must respond within 30 days • Errors, differences between application and previous employer must be addressed 8/10/2016 Session Three WELWebCE 2016 75
TESTING AND VERIFICATION CONT. • Current and proper driver license (CDL) to operate the equipment • Current MVR (no older than one [1] year) – An employer MVR and the MVR must be acceptable • Drug test results must be in possession of insured for all new hires • All employees must be subject to random testing and the selection process as well as results must be in possession of insured • DOT physicals must be in possession of insured – Cannot be older than two (2) years – Must be acceptable – The driver must also retain a copy to carry with them at all times when driving a CMV 8/10/2016 Session Three WELWebCE 2016 76
KEY CONCERN IN PROVIDING INSURANCE TO MOTOR CARRIERS IS “WHO IS DRIVING THE COVERED AUTO” • The insured • Hiring standards considerations • Freight rates • Benefits • Home time • Pay • Driver turnover – Both “employees” and independent contractors • Safety rating – Control of operations • Knowledge of all drivers 8/10/2016 Session Three WELWebCE 2016 77
KEY CONCERN IN PROVIDING INSURANCE TO MOTOR CARRIERS IS “WHO IS DRIVING THE COVERED AUTO” CONT. • The driver • Experience (not age) • Past history • On-road • State enforcement officers • DOT violations • PSP – Hiring consideration • MVR’s – Business and personal • Insurance carrier requirements for acceptance and pricing • Share with insured 8/10/2016 Session Three WELWebCE 2016 78
8/10/2016 Session Three WELWebCE 2016 79
8/10/2016 Session Three WELWebCE 2016 80
OTHER REQUIREMENTS THAT AFFECT DRIVERS AND THEIR SELECTION TO HIRE AND INSURE • Pre-Employment Screening Program (PSP) • Available information to motor carrier hiring new drivers about drivers’ past on-road activities, inspection reports (36 months – 5 years crashes) • Every time a motor carrier gets cited for a violation, the driver will be cited too • The history carriers with them to new employment • Additional hiring and disciplinary standards based on on-road activities • EPL coverage needs 8/10/2016 Session Three WELWebCE 2016 81
MOTOR CARRIER HIRING AND DISCIPLINE OF DRIVERS • Presented to new hires • Ask: “Do you meet these requirements?” • If yes, then conditional job offer and process the driver for meeting DOT requirements as well as motor carrier • After hire • Control the activities • Must be monitored and enforced 8/10/2016 Session Three WELWebCE 2016 82
MOTOR CARRIER HIRING AND DISCIPLINE OF DRIVERS CONT. • Include • Experience requests • MVR and on-road activities (PSP – CSA validation) • Physical and other requirements • Employee handbook • Independent contractor – In agreement?? 8/10/2016 Session Three WELWebCE 2016 83
CONSIDERATIONS • To meet the motor carrier’s promise to their customers to be at the location to pick-up a load, there must be a driver behind the wheel • At least today – • Have you heard about Freightliner’s inspiration truck that is self-driven and licensed to operate in Nevada? 8/10/2016 Session Three WELWebCE 2016 84
DRIVER SHORTAGE • More freight but fewer people who want to be an over-the- road trucker (stay overnight – 300 mile plus radius) • Depends on who you are talking to – • 25,000 to 30,000 driver shortage today • 300,000 in 10 years • Driver turnover • 97% for truck load carriers over 300 mile radius 8/10/2016 Session Three WELWebCE 2016 85
DRIVER SHORTAGE CONT. • Age of over-the-road drivers is over 45 years of age • Where will drivers of the future come from? • What training will they have? • What experience will they have? 8/10/2016 Session Three WELWebCE 2016 86
FMCSA REQUIREMENTS FOR DRIVERS • 18 years of age • Intrastate – CDL • 21 years of age • Interstate – CDL • Risk in Wilmington, NC with a driver • Less than 21 years of age – Intrastate CDL • Delivering soft drinks • Cannot have driver deliver to North Myrtle Beach, SC (50 miles) but can send to Ashville, NC (320 miles) • Which is more important? • State lines or distance? • Physical condition • DOT physical • Age or condition 8/10/2016 Session Three WELWebCE 2016 87
REQUIREMENTS FOR DRIVERS CONT. • Insurance industry • 23 years of age and 3 years’ experience or not qualified • Options for large motor carriers • Students from driver training schools • Have standards • In-house training – Post driver training school • Will insurance carrier accept? • Smaller motor carriers • Any hope? 8/10/2016 Session Three WELWebCE 2016 88
PSP SAFETY IMPACT ANALYSIS • Every time a vehicle is stopped and inspected the results are placed in the data base • Carrier Safety Measurement System • Basis of CSA • Driver Safety Measurement System • 3-year’s inspections • 5-year’s crashes • Used for information and available through PSP for new employees 8/10/2016 Session Three WELWebCE 2016 89
PSP SAFETY IMPACT ANALYSIS CONT. • FMCSA reports results of a study that shows crashes are reduced and OOS are reduced when motor carriers use PSP • FMCSA evaluated the safety performance of carriers’ use of PSP at least monthly • Crash and driver OOS rates were compared for a 12-month period prior to and 12 months after the start of using PSP • The data was then compared to a control group of motor carriers that did not use PSP 8/10/2016 Session Three WELWebCE 2016 90
PSP SAFETY IMPACT ANALYSIS CONT. • All driver class sizes experienced decreases in crash and OOS results • On average, carriers who use PSP reduced crashes by 8% and driver OOS rates fell by 17.2%! 8/10/2016 Session Three WELWebCE 2016 91
THOUGHTS • Rob Moseley has used this example • An accident happens – • The representative of the motor carrier is on the witness stand and asked, “If you had used PSP, the problem that caused the accident would have been found and the driver would not have met your hiring qualifications so would not have been hired, therefore, the accident that injured my client would not have happened. What would it have cost you to have used the government provided system to assist you in screening drivers to keep bad drivers from behind the wheel of an 18-wheeler? -- $10?” • How will that float 8/10/2016 Session Three WELWebCE 2016 92
THOUGHTS CONT. • As an insurance provider, you are considering PSP as a part of your underwriting and claim information at crash time? • Retail agents, how are you discussing with your insureds and also letting your insurance providers know if your insureds are using PSP? • What does PSP reflect that motor carriers or the insurance industry can use? • Past employment • On-road activities • Verification of exposures 8/10/2016 Session Three WELWebCE 2016 93
THOUGHTS CONT. • Safety technologies – Can they help with less experienced drivers? • Automatic transmission • Anti-rollover • Lane departure warnings • Crash prevention • GPS – Monitoring activities – Informing drivers • Drive cam – Event recorder • Training • Crash information • “Keep it green” 8/10/2016 Session Three WELWebCE 2016 94
THOUGHTS CONT. • Speed limiters • Gas saving • Crash prevention • Electronic logging devices • Address HOS and paperwork • Do your insureds use? • Does the insurance provider know and how are they reacting? • Home more often 8/10/2016 Session Three WELWebCE 2016 95
CONTINUING EDUCATION QUESTION • To drive a CMV per FMCSA regulations, driver must be: • A 18 years old • B 21 years old • C 23 years old 8/10/2016 Session Three WELWebCE 2016 96
INSURING MOTOR CARRIERS HAS NOT BEEN TOO PROFITABLE FOR INSURANCE COMPANIES • Recent articles – • Agent Broker • “Road ahead for fleet owners renewing insurance looks rocky” • National Underwriter • “Hardening Ahead – Commercial auto rates on the rise: Trucking operations grapple with the new reality” • Fitch Report • “Tough times for commercial auto insurers” 8/10/2016 Session Three WELWebCE 2016 97
THE INSURANCE MARKET FOR COMMERCIAL AUTOS • John Love’s thoughts -- 8/10/2016 Session Three WELWebCE 2016 98
ADDITIONAL CONSIDERATIONS 8/10/2016 Session Three WELWebCE 2016 99
ADDITIONAL CONSIDERATIONS CONT. • New applicants: URS Phase One impacts only new registration applicants, who will be required to use the URS online registration application beginning on December 12, 2015. Only the initial registration by new applicants will be done using the URS online registration application until 2016 • Already registered with FMCSA: All other aspects of the URS regulation, including the new fee structure, will roll out during a later phase. All existing entities with a US DOT, MC or FF number, or combinations of them will continue to use existing agency forms and processes to conduct updates, seek additional registration authorities, make administrative filings, and other registration related transactions until September 30, 2016. The requirement for all existing private hazmat and exempt for-hire carriers to have proof of financial responsibility in place will take effect December 31, 2016. The requirement for all existing private and exempt carriers to have BOC-3 filings in place will take effect December 31, 2016. New applicants will begin providing this information September 30, 2016. 8/10/2016 Session Three WELWebCE 2016 100
Recommend
More recommend
