AGENCY TESTIMONY
Insurance issues in the taxi and for-hire vehicle industry
1:23:55
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82 sec
Commissioner Do addresses the significant insurance issues facing the TLC-licensed industry, particularly focusing on the financial condition of American Transit Company, which insures about two-thirds of TLC-licensed taxis and for-hire vehicles. He explains the current situation and ongoing efforts to address the problem.
- American Transit Company's insolvency has been known to regulators for over 40 years
- The company offered lower rates than competitors by operating at a loss, which stifled competition
- The New York State Department of Financial Services (DFS) is working to address the issue with stakeholders
- A comprehensive approach, likely including legislative action, is needed for long-term stability of the for-hire insurance market
- American Transit continues to provide insurance during this critical period
- TLC is working with DFS and state policymakers to secure the long-term health of the taxi and for-hire insurance market
David Do
1:23:55
Another significant issue facing TLC's license industry is the financial condition of American Transit Company insurance company, which ensures about 2 thirds of the TLC license taxis and for hire vehicles Earlier this month, the New York State Department of Financial Services which regulates insurance providers release a regulatory report on American Transit's financial condition detailing their insolvency.
1:24:23
The report also explains that this is not a new issue.
1:24:26
The company's insolvency has been well known by regulators, policymakers, and others for over 40 years.
1:24:32
While insurance is a significant expense for TLC drivers, American Transit essentially offer rates lower than their competitors by operating at a loss which stifled competition.
1:24:44
DFS is working diligently to address this issue with stakeholders, but a comprehensive approach, including legislative action, is likely needed to ensure the long term stability of the far higher insurance market.
1:24:57
Most importantly, American Transit is continuing to provide insurance to TLC licenses during this critical period.
1:25:05
I thank the events for their collaborative approach that they have taken on this matter and look forward to continuing to work with them and state policymakers to secure along the long term health of the taxi and for higher insurance market.
