AB.TNC

Reading: “Alberta Standard Automobile Insurance Policy Form – Transportation Network S.P.F. No. 9,” pp. 1-4.

Authour: Alberta Treasury Board and Finance

Forum

BA Quick-Summary: Alberta Ride-Sharing (TNC) Alberta has created a standard insurance policy for TNCs or ride-sharing providers like Uber. (TNC stands for Transportation Network Companies.) This policy covers the companies and their drivers and can be used by private insurers.

Study Tips

This is not a diffucult reading, but ride-sharing is a hot-button issue in many cities today. This particular reading is about ride-sharing in Alberta, but if you want some extra context, here's a short but interesting news item about ride sharing in BC.

Estimated study time: 1 hr (not including subsequent review time)

BattleTable

Based on past exams, the main things you need to know (in rough order of importance) are:

• the concept of "use" periods and how they determine coverage

Since this is a relatively new paper, make sure to review the BattleCards as well as the old exam problems.

reference	part (a)	part (b)	part (c)	part (d)
E (2019.Spring #3)	SPF 9 coverage triggers: - accident benefits	SPF 9 covg. exclusions: - while logged in
E (2018.Fall #4)	"use" periods: - liable insurer / amount	"use" periods: - liable insurer / amount
E (2017.Fall #2)	"use" periods: - covered/(not covered)	"use" periods: - covered/(not covered)	"use" periods: - covered/(not covered)

In Plain English!

Section A: Intro

Many cities are currently struggling with issues surrounding ride-sharing: proper insurance coverage, safety of passengers, and competition with traditional taxis. As insurers, our role is to offer coverage so that both providers and consumers of this service are protected. Alberta's Standard Policy Form 9 (SPF9) is one example of how this is done.

Question: what does Alberta's Standard Policy Form 9 (SPF9) provide

• SPF9 provides auto insurance for Transportation Network Companies (TNCs) and their authorized TNC drivers.

This form is approved pursuant to the Alberta Insurance Act. Click for a memory trick.

Section B: Use Periods

A use period is a unique aspect of TNC coverage. This concept arises because drivers use their personal vehicles and will have 2 separate insurance policies:

• their "normal" policy which covers typical personal use of their vehicle
• their "TNC" policy which is triggered when their personal vehicle is used for ride-sharing

In the event of an accident, the 4 use periods describe which insurer should claims be reported to.

use period	description of use period	report claim to...	coverage
period 0	personal use: driver is not logged in to the TNC app	driver's own insurer	depends on driver's personal policy (no coverage from SPF9)
period 1	driver is logged in to the TNC app, but has not accepted a ride	driver's own insurer and TNC insurer 1	Third Party Liability, AccBen, no physical damage
period 2	driver has accepted a ride and is en route	TNC insurer	Third Party Liability, AccBenn, optional physical damage
period 3	passengers are in vehicle	TNC insurer	Third Party Liability, AccBenn, optional physical damage

¹ For period 1, TNC coverage would be triggered only if the driver's own insurer denied the claim.

Adventures of Alice-the-Actuary

Alice the Actuary is tired of studying for exams and likes to chill by using her personal vehicle for ride-sharing. Assume that she has a personal auto policy and is also covered by her TNC insurer. When she leaves her condo, she is not logged in to the TNC app. Who would provide coverage in each of the following accident situations?

1. Alice dings the car next to her while backing out of the ridiculously tight parking space in her condo's underground parking garage.
2. Alice successfully exits her parking garage, logs in to the TNC app, then waits on a side-street for notification of a fare. A skater-boarder with orange hair and an eyebrow piercing wipes out, and his flying skateboard dents her fender.
3. Alice receives a fare, then pulls out into traffic. She didn't see the bicyclist, and he accidentally damages her mirror with the handlebars of his bike.
4. Alice picks up an obviously inebriated couple. They are in the back seat and while she's stopped behind another car at a traffic light, they suddenly yell "Woo-hoo!!" Alice is startled and her foot jumps off the brake. She bumps the car in front of her, and one of the drunk passengers breaks his nose when he is thrust into the Alice's headrest from behind.

Answers: The key here is to recognize the various use periods and to know which insurer is liable in each case.

1. She is not logged in to the app (use period 0) so her own insurer would provide coverage, if appropriate.
2. She is logged in but has not picked up a fare (use period 1). It isn't clear who would provide coverage. She would notify her own insurer first, but if they refused to provide coverage, she would notify the TNC insurer. (But she would discover that SPF9 doesn't provide physical damage in period 1, so she's out of luck!)
3. She is enroute to a fare (use period 2) so the TNC insurer would provide coverage (if the optional physical damage coverage was purchased.)
4. The passengers are in her car (use period 3) so the TNC insurer would provide coverage.

Post-script: Alice decides that ride-sharing isn't so chill after all, and goes back to spending her nights and weekends studying. :-(

mini BattleQuiz 1 You must be logged in or this will not work.

Sections C,D,E,F: Information for Various Parties

The parties involved in ride-sharing include:

• TNC consumers
• TNC drivers
• TNCs (the companies that provide the actual ride-sharing services)
• insurers & brokers that provide TNC policies

The source text issues a warning to users of TNC services: Make sure your driver's TNC has proper insurance coverage!

Question: identify 3 pieces of information a TNC must make available to the public and consumers

• a proper municipal license
• a valid auto insurance policy (via public website or driver's smart-phone)
• driver-specific IIF or Insurance Information Form (via driver's smart-phone)

The Insurance Information Form which must be made available to passengers, is really basic - things like name of insured, name of insurer, policy #, policy effective/expiration date, and vehicle description. I can't imagine the exam would ask you to memorize the layout of this form, but you should have some idea of what it is.

Here's something else that's very important to keep in mind, both as a consumer or a TNC driver.

Question: does SPF9 cover you while carrying street-hailed passengers or transporting cargo

• NO!!

Alice told me an interesting fact from her brief career as a TNC driver: If you drive for a TNC, you must notify your personal auto insurance provider. Even though they aren't the primary source of coverage when you're transporting TNC customers, they want to know that you're doing it.

Alice also told me horror stories about other drivers, (like being tipsy on New Year's Eve or prone to road-rage.) For that reason, Alice is very careful to check the reviews for her driver before getting into an Uber. It only takes a few seconds. Anyway, even for the many good TNC drivers, accidents are inevitable.

Question: in the event of an accident, describe the exchange of information required between the TNC, insurance company, and insurance brokers

accident info: dates, times, circumstances

electronic info: precise times when driver was logged in and logged out of the TNC app

mini BattleQuiz 2 You must be logged in or this will not work.

Section G: Insurance Information Form

The IIF (Insurance Information Form) was discussed above. (This is a very short section in the source text.)

Brainstorming

Note: The Usage-Based Insurance reading has been removed from the syllabus so this brainstorming section isn't as relevant anymore. You can read through it but you don't need to specifically memorize anything related to UBI.

Brainstorming is always the fun part! The facts to memorize are listed above, but let's think a little more deeply about how this TNC reading fits within the syllabus. My first thought is that this is somewhat similar to FSCO's paper on Usage-Based Insurance. UBI is another example of how technology is disrupting our insurance and transportation systems. So, a good exam question might be:

Question: identify two examples of technology that are disrupting the insurance and transportation marketplace.

• ride-sharing services
• usage-based insurance

But that's a bit too easy on its own. That might be part (a) of a multi-part question. How can we build on that?

Question: describe 1 similarity and 1 difference related to the insurance aspect of the technologies you identified in part (a)

Similarity: Both require new technology to function

• UBI requires a device installed in your car to capture driving data.
• Ride-sharing technology requires a smart-phone app to connect providers and customers.

Difference:

• UBI is a way for insurance customers to lower their rates based on good driving habits.
• Ride-sharing technology requires a new type of insurance policy to cover the use of personal vehicles to carry paying customers.

Now, with any new technology, there are dangers. For a possible part (c):

Question: briefly describe issues or dangers associated with the technologies you identified in part (a)

Ride-sharing: must ensure that drivers have proper coverage to protect drivers and consumers (this is being addressed), but also the competitive impact to traditional taxi-drivers and taxi companies.

UBI: collects personal data, so data privacy, and transparency regarding use of UBI data, are issues that must be addressed. (There are old exam questions for FSCO.UBI on this)

Note that since the CAS has been trying to move away from strict memorization, you should think about preparing for questions that ask you to compare and contrast a pair of related readings.

mini BattleQuiz 3 You must be logged in or this will not work.

BattleCodes

Memorize:

• purpose of Alberta SPF9 (Standard Policy Form 9)
• defns of use periods and applicable insurance provider
• 3 pieces of insurance-related information a TNC must make available to providers and customers
• 5 items of post-accident information whose exchange must be facilitated between the TNC, insurance providers & brokers
• purpose and basic layout of the Insurance Information Form

Conceptual:

• similarities and differences between ride-sharing and UBI
• how to identify which insurance provider should be contacted after an accident (based on use periods)

Calculational:

• none

Full BattleQuiz You must be logged in or this will not work.

  Forum