Avis 2010 Annual Report Download - page 20

Table of Contents
compliance status of the tanks and the nature of the release, these tank funds may be available to us for use in remediating future releases from
our tank systems.
Loss Damage Waivers
Twenty-four states have enacted legislation which requires disclosure to each customer at the time of rental that damage to the rented vehicle
may be covered to some extent by the customer’
s personal automobile insurance and that loss damage waivers may not be necessary. In addition,
four states have statutes which establish or cap the daily rate that can be charged for loss damage waivers.
Insurance
As a result of our reinsurance of the optional insurance coverages that we offer through an unaffiliated third party insurance company as well as
other insurance obligations, we are subject to regulation under the insurance statutes, including insurance holding company statutes, of the
jurisdictions in which our insurance company subsidiaries are domiciled. These regulations vary from jurisdiction to jurisdiction, but generally
require insurance holding companies and insurers that are subsidiaries of insurance holding companies to register and file certain reports,
including information concerning their capital structure, ownership, financial condition and general business operations with the regulatory
authority of the applicable jurisdiction, and require prior regulatory agency approval of changes in control of an insurer and intra-corporate
transfers of assets within the holding company structure. Such insurance statutes may also require that we obtain limited licenses to sell optional
insurance coverage to our customers at the time of rental.
Franchise Regulation
The aspect of our business that involves licensing third parties to operate locations under the Avis or Budget name, in exchange for the payment
of a royalty, is regulated by various state franchising laws, as well as by the Federal Trade Commission (the “FTC”). The FTC requires that we
make extensive disclosure to prospective licensees but does not require registration. A number of states require registration and/or disclosure in
connection with licensing offers and sales. In addition, several states have “franchise relationship laws” that could limit our ability to, among
other things, terminate license agreements or withhold consent to the renewal or transfer of these agreements. Although our licensing operations
have not been materially adversely affected by such existing regulations, we cannot predict the effect of any future federal, state or local
legislation or regulation.
Privacy
Laws in some countries and jurisdictions limit the types of information we may collect about individuals with whom we deal or propose to deal,
as well as how we collect, retain and use the information that we are permitted to collect, some of which is non-public personally identifiable
information. The centralized nature of our information systems requires the routine flow of information about customers and potential customers
across national borders, particularly into the United States. If this flow of information were to become illegal, or subject to onerous restrictions,
our ability to serve our customers could be seriously impaired for an extended period of time. In addition, our failure to maintain the security of
the data we hold, whether as a result of our own error or the actions of others, could harm our reputation or give rise to legal liabilities leading to
lower revenue, increased costs and otherwise adversely impact our results of operations. In addition, the Payment Card Industry (the “PCI”)
imposes strict customer credit card data security standards to ensure that customers’ credit card information is protected. Failure to meet the PCI
data security standards could result in substantial increased fees to credit card companies, other liabilities and/or loss of the right to collect credit
card payments.
EMPLOYEES
As of December 31, 2010, we employed approximately 21,000 employees, of which approximately 7,000 were employed on a part-time basis.
Approximately 28% of our employees are covered by collective bargaining agreements. We believe our employee relations are satisfactory. We
have never experienced a large-scale work stoppage.
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