Gallagher Bassett We Guide. We Guard. We Go Beyond.

LEAD STORY

The nation's railroads have until the year's end to establish Positive Train Control (PTC) systems or apply to the Federal Railroad Administration (FRA) to approve an “alternative schedule” for full implementation no later than December 31, 2020. Rail agencies that fail to complete PTC protocols or secure an extension could face fines of up to $27,000 a day. This week we take a closer look at rail safety.

HEADING TOWARD GLACIER GULCH

Claim severity is increasing faster for rail systems than for bus operations. A survey of 38 organizations representing 116 individual transit systems across 16 states, Washington, D.C., and Canada, and about 1.8 billion rider trips each year report that claim severity is increasing at a 2% rate for bus operations and a 5.5% annual rate for rail operations. Incidentally, today marks the 30^th anniversary of one of the UK's most deadly rail accidents at Clapham Junction, which sparked the development of PTC and crashworthiness standards abroad. Today, the global train control and management systems comprise a $2.5 billion market, which is expected to rise to $5 billion by 2024.

WHAT MATTERS IS DECIDING TO GET ON

Here in the U.S., the FRA reported on PTC implementation through the third quarter of 2018. Two-thirds of the nation's railroads have completed PTC system hardware installation, and one-third of railroads are between 95 and 99 percent away from completion. PTC is in operation on 71 percent of freight railroads' required route miles and 26 percent of passenger railroads' required route miles. This summer the FRA awarded $203 million in grant awards in August for PTC implementation to 28 projects in 15 states, which are heading toward completion.

WHO IN BLAZES APPLIED THE EMERGENCY BRAKE?

PTC systems are designed to prevent train-to-train collisions, high speed derailments, and incursions into roadway work limits. PTC sends and receives a continuous stream of data transmitted by wireless signals about the location, speed, and direction of trains. They use digital radio links, global positioning systems, and wayside computer control systems to aid dispatchers and train crews in safely managing train movements.

THE MOST REAL THINGS IN THE WORLD ARE THINGS WE CAN'T SEE

The FRA published its long-awaited final rule to modernize passenger railcar crashworthiness standards, which become effective January 22, 2019. The new rule will allow passenger rail agencies to adopt railcars designed with internal crash energy management (CEM) techniques. CEM refers to crumple zones designed to absorb the energy of a collision. Until now, U.S. passenger railcars were required to meet “buff strength” crashworthiness standards related to railcar integrity, engineer seat integrity. We'll keep tracking these rail safety issues in 2019.

Brexit

BREXIT PAUSE

Prime Minister Theresa May paused the Brexit process this week by delaying a parliamentary vote on her deal for the country to leave the European Union. The Prime Minister noted that lawmakers in the House of Commons continue to express widespread concern over Northern Ireland and a concept known as the “backstop.” Part of Prime Minister May's proposal includes an arrangement designed to ensure there is no return to a "hard border" between Ireland, which will remain part of the European Union, and Northern Ireland when the UK leaves the bloc next March.

REACTION

European Council President Donald Tusk said that the EU will not renegotiate the deal, including the backstop. EC President Tusk added that the EU is ready to discuss how to facilitate UK ratification. At present, EU nations are preparing for a so-called “no-deal BREXIT” scenario, which some commentators suggest could have significant repercussions across Europe and around the world.

Making Our Way Around the Country

MEDICARE

The White House Office of Management and Budget, Office of Information and Regulatory Affairs (OIRA) listed on its regulatory dashboard a notice about a proposed Liability Medicare Set Asides (LSMA) rulemaking. The Centers for Medicare and Medicaid has not published a proposed rule, at least not yet. However, agencies typically submit proposed rules to OIRA for review before publication. The abstract of the rule provided by OIRA indicates that beneficiaries will have an opportunity to select an option to balance the need for future medical obligations, when they are subject to automobile and liability insurance, with the need to satisfy Medicare Secondary Payer (MSP) obligations. There will be more to come on LMSAs next year. 

COMBUSTIBLE DUST

The Chemical Safety Board (CSB) is seeking comments on new rules and standards concerning combustible dust. The CSB extended its comment period through December 31^st for companies, regulators, inspectors, safety training providers, researchers, unions, and workers in dust-producing operations to provide input. Comments will be used to explore the conditions that influence the control and management of combustible dust in order to seek out a deeper understanding of the real-world challenges to preventing dust explosions.

NFIP

The National Flood Insurance Program was extended two more weeks as part of a broader stop-gap funding deal. The two-week extension came as part of a bigger deal to avert a potential partial shutdown of the federal government. President Donald Trump is expected to sign the extension. Congress now faces a new December 21^st deadline to reach a deal on government funding as well as extend the flood insurance program, yet again.

UTAH

Utah Governor Gary Herbert signed a medical cannabis bill, which comes with a stricter regulatory system than the medicinal marijuana law approved by voters last month. Governor Herbert commended the bill, stating that qualified patients will now be able to receive quality-controlled cannabis products from a licensed pharmacist in medical dosage form, in a way that prevents diversion of product into a black market. The issue is far from settled. Utah voters asked the state's Supreme Court to restore Proposition 2, declaring a “constitutional crisis” over the Legislature's decision to pass a bill replacing the medical cannabis initiative approved in a ballot initiative in November.

THERE'S NO GREATER GIFT THAN FRIENDSHIP

We very much enjoyed connecting with so many readers, colleagues, and friends at the National Workers' Compensation and Disability Conference last week. Thank you for coming to the Exhibit Hall to see us during the conference. Next week will be our final edition of 2019! So we'll save our full Seasons Greetings until then. For now, please let us express our full gratitude for your loyal readership.