Wednesday, August 4, 2010

FMCSA to Allow Canadian Domiciled Motor Carriers/Freight Forwarders to Obtain Required Insurance from Canadian Insurance Companies

(Logistics Blog – Kenneth E. Siegel, Strasburger & Price LLP)

In response to a petition filed by the Canadian government, the Federal Motor Carrier Safety Administration (“FMCSA”) has amended its liability insurance regulations for motor carriers. In another long-overdue step toward full reciprocity, it will now allow Canada-domiciled motor carriers and freight forwarders to maintain – as acceptable evidence of their required financial responsibility for accident liability – insurance policies issued by Canadian insurers legally authorized to issue such policies in the Canadian province or territory where the motor carrier or freight forwarder has its principal place of business.

The change to the regulations will eliminate the need for Canadian insurance companies to link with a “fronting” U.S. insurance company in order to legally insure Canada-domiciled motor carriers operating in the United States. Notice of the final rule was published by the FMCSA in the Federal Register on July 2, 2010 and becomes effective on August 2, 2010; 75 F.R. 38423. Read more here.