New York City is revising a proposed rule change that would have required taxi and rideshare drivers to be covered by a “solvent and responsible” insurance carrier, following concerns from Uber Technologies that the mandate could leave thousands of drivers uninsured.
The Taxi and Limousine Commission (TLC), which oversees for-hire vehicles in the city, will now only require that insurance policies be issued by companies authorized to do business in New York state, Bloomberg reported.
This change removes the need for vehicle owners to verify the financial status of their insurance carriers. The TLC’s board of commissioners is scheduled to vote on the final rules on Wednesday, with an effective date set for January 1, 2026.
The adjustment comes after Uber expressed concerns that the original proposal lacked clarity in defining “solvent” and “responsible,” which could disrupt the for-hire vehicle insurance market.
TLC officials, alongside Governor Kathy Hochul, have been working to stabilize the insurance market after Bloomberg reported that American Transit Insurance Co., which covers about 60% of the city’s roughly 120,000 for-hire vehicles, is insolvent. The company reported more than $700 million in net losses during the second quarter of 2024 but remains licensed to operate in the state despite issues with timely claims payouts.
In the revised rule document posted on the TLC website, the commission explained that the removal of the “solvent and responsible” language would offer greater coverage flexibility for TLC-licensed vehicle owners while insurance carriers undergo state-level regulatory reviews. The change followed internal reviews and public comments from stakeholders, including counsel for American Transit Insurance Co.
The TLC is also easing its stance on supplementary insurance policies. The final rules will allow vehicle owners to use split coverage to meet minimum requirements, as long as the secondary policies are issued by New York-authorized carriers.
However, the TLC declined Uber’s proposal to allow supplementary policies from non-state licensed carriers, citing concerns that such policies do not provide the same level of protection for consumers. This decision may affect Uber’s partner, Inshur Inc., which insures more than 7% of TLC vehicles but is not licensed in New York, relying on Accident Fund Insurance Co., a licensed firm, according to the report.