FMCSA proposal will save Canadian carriers, insurers money

by Canadian Shipper

OTTAWA, Ont. — The Canadian Trucking Alliance (CTA) is commending the US Federal Motor Carrier Safety Administration (FMCSA) for simplifying the process in which Canadian insurance companies submit information on behalf of their carrier clients.

Currently, Canadian insurers are only allowed to sign proof of financial responsibility forms for carriers as an agent of a US insurer, rather than directly. The Canadian and US insurers enter into a “fronting agreement” – a requirement that doesn’t apply to US carriers operating in Canada. As a result, Canadian carriers and insurers shoulder a “disproportional cost and administrative burden and inconvenience,” according to the FMCSA.


The FMCSA proposal acknowledges “it is inappropriate to impose on Canada-based carriers and insurance companies requirements that Canada does not impose on US-based motor carriers and insurance companies.” 


If the FMCSA proposal is adopted, it could save Canadian carriers $273 million over a 10-year period. The proposal emerged through discussions with industry groups such as CTA and government, as part of the Security and Prosperity Partnership (SPP) of North America.


“The change being proposed is an example of the so-called low-hanging fruit that initiatives such as the SPP were designed to address in the name of North America prosperity,” said CTA CEO David Bradley. “I have to admit to being frustrated by the pace of reform, but in the end FMCSA has done the right thing and we hope to see a final regulation published in the not too distant future.”

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