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Another Fatal Bus Crash Highlights an Expanding Industry’s Lack of Oversight

Tragedy hit the highway again today as yet another commercial bus ride turned fatal. Four are dead and 50 have been taken to 11 area hospitals for injuries after a motorcoach headed for New York’s Chinatown from North Carolina ran off the highway and flipped upside down in Virginia on I-95, according to the Richmond Times-Dispatch (whose video above shows a helicopter leaving the scene of the accident).

Authorities have cited driver fatigue as the cause of the crash, which involved a 60-person bus owned by Charlotte-based Sky Express Inc., a company with a poor inspection history.

Sky Express Inc., has a troubled inspection history, according to the Federal Motor Carrier Safety Administration’s web site.

The company performed worse than 97 percent of all passenger bus companies within the last 12 months and 99.7 percent worse in the last 24 months in the “Driver Fitness” category, FMCSA  records show.

Additionally, the firm scored worse than 77.80 percent of all bus companies within the last 12 months and 86.2 percent worse in the last 24 months in the “fatigued driver” category, records shows.

Nothing will bring back the dead, but perhaps this latest tragedy will spur further outcry for better regulation of an industry that has been expanding in recent years without much oversight.

Emily highlighted this concern in last month’s issue of our own Risk Management magazine.

In New York, most people rely on mass transit. And for getting out of town, one of the most popular choices are the motorcoach buses that depart from Manhattan’s Chinatown. These “Chinatown buses” offer riders a cheap ticket out of town to destinations such as Boston, Philadelphia, Washington and various casinos in the area.

But these low-cost tour bus companies have a horrifying track record of safety. On March 12 that fact tragically came to light when a bus returning to Chinatown from the Mohegan Sun Casino in Connecticut overturned on a Bronx highway, killing 15 people and injuring 20. Just two days later, two people were killed in another accident involving a Chinatown bus returning to New York from Philadelphia. That bus line, Super Luxury Tours, has one of the worst driver safety ratings in the nation, according to a report from the U.S. Department of Transportation. Though Super Luxury Tours may be considered the bad seed of the tour bus industry, many motorcoach companies have a spotty safety record. In fact, the Advocates for Highway and Auto Safety reported 34 motorcoach crashes nationwide in 2010 that resulted in 46 deaths and injuries to 363 people.

As Emily goes on to write, in New York, Senator Chuck Schumer (D-NY) has called for an audit of all bus operators and, across the Hudson River, Senator Frank Lautenberg (D-NJ) has written to U.S. Transportation Secretary Ray LaHood, urging further legislative action from the federal level.

Thus far, two stalled-in-Congress bills have attempted to impose greater regulations: the Motor Coach Enhanced Safety Act and the Bus Uniform Standards and Enhanced Safety (BUSES) Act. Even after this latest crash, it is not certain that either will advance towards becoming law, at least in part due to prohibitive costs (including the $25 million Department of Transportation estimate it will cost to install seat belts in all buses) and industry opposition, as noted by The Carlson Law Firm PC.

At this point, it is unclear whether either of the two bus safety bills will make it into law. Past attempts to strengthen federal bus safety laws have been largely unsuccessful. The NTSB has been recommending changes to improve bus safety for years, but so far Congress has been unable to implement the vast majority of the recommendations into law.

Regardless of whether Congress is successful in passing tougher bus safety regulations this year, those who have been involved in a bus accident still have legal options available to them. This includes bringing a civil claim against the motor coach company and others for any injuries and other losses they have suffered. Some of the types of compensation that may be available in a bus injury claim include medical expenses, lost wages and other earnings, pain and suffering and other damages.

Stay tuned, I guess.

But considering Congress seems to have a lot more on its plate today than bus safety, maybe consider taking Amtrak.

The “Unintended Consequences” of the Neal Bill

In the video below, Swiss Re has done a marvelous job using new media to help advocate its position against “The Neal Bill” (HR 3424) that is aiming to impose a new tax on foreign reinsurers — something most of the stakeholders in the insurance industry are against.

The Risk and Insurance Management Society (RIMS), a nonprofit organization that represents risk managers (and publishes this blog … and pays my salary), is also firmly opposed due to the fact that any tax on the reinsurance industry will only be passed on first to the insurance industry and then to insurance buyers. Taxing reinsurers will also threaten capacity and make coverage harder to find at any price.

National Underwriter wrote a good, informative piece explaining such:

Speaking for RIMS, Scott Clark, risk and benefits officer for the Miami-Dade County School Board and a RIMS board liaison, said, “The group has always opposed proposals to restrict market access to insurance capacity.”

Mr. Scott called the legislation “a great threat to insurance capacity in the United States.”

“Over the past decade it has been proposed several times, not surprisingly, by a handful of U.S. insurers which seek to gain via a protected market that would allow them to charge higher prices,” Mr. Clark said.

Honestly, the changes proposed by this bill represent yet another example of how poorly Washington understands insurance. Advocates of the bill probably think they’re helping out insurance buyers by giving U.S. insurers an advantage. They’re not. No one — not reinsures, not insurers, not brokers, not commercial buyers, not personal line buyers — will benefit here.

And Swiss Re sums that all up perfectly in 140 seconds. (For more on the issue, you can check out www.KeepInsuranceCompetitive.com)