HF 604 — A bill for an act establishing a motor vehicle insurance verification program, establishing fees, and including penalty and effective date provisions. (Formerly HSB 170.)

NEW SECTION.

3.7.

“Financial institution” means financial institution as LSBdefined 2632HVin (3)18 87U.S.C. -1- ns/nh 1/14 H.F.

604 defined in 18 U.S.C.

4.8.

To establish a motor vehicle insurance verification databaseHF to604 verify(4) compliance87 with-4- thens/nh/md requirements4/13 ofH.F. section 321.20B.

604 database to verify compliance with the requirements of section 321.20B.

The department shall establish an advisory council, chaired by the director of the department or a representative of the department appointed by the director, consisting of six members including the director of the department or the representative of the department appointed by the director, a representative of the department of public safety, an LSBinsurance 2632HVcompany (3)representative 87appointed -2-by ns/nhthe 2/14commissioner H.F.of insurance, an insurance agent appointed by the commissioner of insurance, a representative of a trade association of property and casualty insurers appointed by the commissioner of insurance, and a representative of a vendor with experience implementing real-time internet services models and databases similar to the database created under this chapter appointed by the director of the department.

604 insurance company representative appointed by the commissioner of insurance, an insurance agent appointed by the commissioner of insurance, a representative of a trade association of property and casualty insurers appointed by the commissioner of insurance, and a representative of a vendor with experience implementing real-time internet services models and databases similar to the database created under this chapter appointed by the director of the department.

Following the competitive bidding procedures as provided inHF chapter604 8A,(4) subchapter87 III,-5- thens/nh/md department5/13 shallH.F. contract with a third party to act as the department’s designated agent for administration of this chapter.

604 in chapter 8A, subchapter III, the department shall contract with a third party to act as the department’s designated agent for administration of this chapter.

The database shall be developed and maintained, and access to a real-time internet services model shall be provided, in accordance with guidelines established by the LSBdepartment 2632HVby (3)rule 87to -3-allow ns/nhauthorized 3/14state H.F.and local law enforcement agencies and financial institutions to efficiently access the records of the database and real-time internet services model, including reports useful for the implementation of this chapter, twenty-four hours per day, seven days per week, subject to reasonable allowances for scheduled maintenance or temporary system failures.

604 department by rule to allow authorized state and local law enforcement agencies and financial institutions to efficiently access the records of the database and real-time internet services model, including reports useful for the implementation of this chapter, twenty-four hours per day, seven days per week, subject to reasonable allowances for scheduled maintenance or temporary system failures.

a.HF 604 (4) 87 -6- ns/nh/md 6/13 H.F.

604 a.

LSB7. 2632HV (3) 87 -4- ns/nh 4/14 H.F.

604 7.

5.9.

If records in the database and the real-time internet services model used by the designated agent indicate that a registered motor vehicle is not covered under an owner’s policy of liability insurance for three consecutive months, at the direction of the department the designated agent shall provide notice by first-class mail to the owner of the motor vehicle that the owner has fifteen days from the date the notice was mailedHF to604 provide(4) one87 of-7- thens/nh/md following:7/13 H.F.

604 mailed to provide one of the following:

The designated agent shall update the database regarding each notice sent to a motor vehicle owner under LSBsubsections 2632HV1 (3)and 872, -5-indicating ns/nhthe 5/14information H.F.provided by the motor vehicle owner or the owner’s failure to provide proof of financial liability coverage, as applicable.

604 subsections 1 and 2, indicating the information provided by the motor vehicle owner or the owner’s failure to provide proof of financial liability coverage, as applicable.

The department shall provide to the owner of the motor vehicle appropriate notice of the suspension, order the owner to surrender the registration plates and registration receipt forHF the604 vehicle(4) to87 the-8- countyns/nh/md treasurer,8/13 adviseH.F. the owner of the legal consequences of operating a vehicle with a suspended registration and without financial liability coverage, and instruct the owner on how to reinstate the vehicle registration once the owner has obtained financial liability coverage for the vehicle.

604 for the vehicle to the county treasurer, advise the owner of the legal consequences of operating a vehicle with a suspended registration and without financial liability coverage, and instruct the owner on how to reinstate the vehicle registration once the owner has obtained financial liability coverage for the vehicle.

LSB7. 2632HV (3) 87 -6- ns/nh 6/14 H.F.

604 7.

6.10.

Except as provided in paragraph “b”, each insurer that issues a policy to a motor vehicle owner in this state that includes motor vehicle liability coverage, uninsured motorist coverage, underinsured motorist coverage, or personalHF injury604 coverage(4) shall,87 on-9- orns/nh/md before9/13 theH.F. seventh and twenty-first days of each calendar month, submit to the department’s designated agent a record of each motor vehicle insurance policy that was issued by the insurer and in effect for a vehicle registered or garaged in this state as of the date of the previous submission.

604 personal injury coverage shall, on or before the seventh and twenty-first days of each calendar month, submit to the department’s designated agent a record of each motor vehicle insurance policy that was issued by the insurer and in effect for a vehicle registered or garaged in this state as of the date of the previous submission.

The name, date of birth, and driver’s license number, if the insured provides a driver’s license number to the insurer, LSBof 2632HVeach (3)insured 87owner -7-or ns/nhoperator, 7/14and H.F.the address of the named insured.

604 of each insured owner or operator, and the address of the named insured.

7.11.

1.HF 604 (4) 87 -10- ns/nh/md 10/13 H.F.

604 1.

For the purpose of investigating, litigating, or enforcing the financial liability coverage requirements of section 321.20B, the designated agent shall, upon request, issue to any state or local government agency or court a LSBcertificate 2632HVdocumenting (3)motor 87vehicle -8-financial ns/nhliability 8/14coverage, H.F.according to the database, of a specific individual or motor vehicle for the time period designated by the government agency or court.

604 certificate documenting motor vehicle financial liability coverage, according to the database, of a specific individual or motor vehicle for the time period designated by the government agency or court.

(6) A person suffering loss or injury in a motor vehicle accidentHF in604 which(4) the87 individual-11- wasns/nh/md involved,11/13 butH.F. only as part of an accident report as authorized in section 321.271 relating to access to accident reports.

604 accident in which the individual was involved, but only as part of an accident report as authorized in section 321.271 relating to access to accident reports.

Upon request of a financial institution for the purpose LSBof 2632HVprotecting (3)the 87financial -9-institution’s ns/nhbona 9/14fide H.F.security interest in a motor vehicle.

604 of protecting the financial institution’s bona fide security interest in a motor vehicle.

3.HF 604 (4) 87 -12- ns/nh/md 12/13 H.F.

604 3.

An insurer acting in compliance with this chapter shall not be liable to any person for the disclosure of information LSBsupplied 2632HVto (3)the 87department -10-or ns/nhdesignated 10/14agent. H.F.

604 supplied to the department or designated agent.

8.12.

EXPLANATIONHF The604 inclusion(4) of87 this-13- explanationns/nh/md does13/13 not constitute agreement with the explanation’s substance by the members of the general assembly.

This bill establishes a motor vehicle insurance verification program to be administered by the department of transportation (DOT).

Following the appropriate competitive bidding procedures, the DOT is required to contract with a third party to act as the DOT’s designated agent for administration of the program.

The bill requires the DOT to establish an advisory council to make recommendations to the DOT on the best methods and practices for implementing a real-time internet services model for insurance verification, to assist in the development of a guide for insurers detailing the data fields and other information necessary for compliance with the bill, and to provide an annual report to the DOT detailing the improvements and implementation efforts relating to insurance verification in other states for consideration in improving compliance and operations in this state.

The designated agent is required to establish and maintain a database containing information from insurers relating to motor vehicle insurance coverage for registered motor vehicles, motor vehicle identification information, personal identification information for registered owners of motor vehicles, and any other information provided to the designated agent by the DOT.

At least twice per month, the designated agent must update the LSB 2632HV (3) 87 -11- ns/nh 11/14 H.F.

604 database and compare current motor vehicle registrations with updated insurance information.

If records in the database indicate that a registered motor vehicle is not covered under an owner’s policy of liability insurance, the bill requires the designated agent to use a real-time internet services model to determine if the registered motor vehicle is covered under an owner’s policy of liability insurance.

The files in the database must be archived semiannually and audited by the DOT at least annually.

If database records and the real-time internet services model show that a registered motor vehicle is not covered under an owner’s policy of liability insurance for three consecutive months, the designated agent is required to send a notice to the owner requiring the owner to respond within 15 days by providing proof of financial liability coverage or proof that the owner is exempt from the requirement to maintain financial liability coverage.

If the owner fails to respond, a second notice must be sent.

If the owner does not respond to the second notice, the owner’s motor vehicle registration must be suspended by the DOT and the owner is required to surrender the registration plates and registration receipt for the vehicle to the county treasurer.

In order to reinstate the registration for the vehicle, the owner must comply with financial responsibility requirements and pay an administrative fee of $100.

The fees collected are to be used by the DOT exclusively to offset the costs of administering the program, including payments made to the designated agent.

The bill provides that if a motor vehicle is covered by a form of financial liability coverage other than an insurance policy, or if a real-time internet services model indicates a vehicle is appropriately insured, that fact shall be noted in the database.

The bill prohibits a person from providing false or fraudulent information to the DOT or the DOT’s designated agent in relation to the motor vehicle insurance verification LSB 2632HV (3) 87 -12- ns/nh 12/14 H.F.

604 program.

A violation of this provision is a simple misdemeanor.

The bill requires each insurer that issues a policy to the owner of a motor vehicle that includes motor vehicle liability coverage, uninsured motorist coverage, underinsured motorist coverage, or personal injury coverage to, before the 7th and the 21st of each month, provide the DOT’s designated agent with a record of each motor vehicle insurance policy issued by the insurer and in effect for vehicles registered or garaged in the state as of the date of the previous submission.

Vehicles subject to apportioned registration under Code chapter 326 are not included in this requirement.

Insurers that fail to comply with the reporting requirement may be assessed a civil penalty of $250 per day.

However, the DOT may waive the penalty upon a showing that the failure was inadvertent, accidental, or the result of excusable neglect.

An insurer that discloses records to the DOT’s designated agent in a reasonable, good-faith effort to comply with the bill is not subject to the penalty.

Information contained in the database is confidential, but the bill provides exceptions for certain disclosures, including disclosures to state or local government agencies and courts for specified purposes, to individuals and certain other authorized persons, for purposes of an accident investigation, to law enforcement agencies and peace officers for certain official purposes, to the state auditor, and to financial institutions with a security interest in a motor vehicle.

The designated agent may be authorized by the DOT to provide certified copies or electronic records, as appropriate, and to charge a fee for the provision of records and authentication of documents.

A person, including the designated agent, who knowingly releases or discloses information from the database for a purpose other than those authorized in the bill or to a person who is not entitled to such information is guilty of a class “D” felony.

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604 The bill provides that the state and the DOT’s designated agent are not liable to any person for gathering, managing, or using the information in the database in compliance with the bill.

The bill further provides that the designated agent is responsible for maintaining and securing the information in the database provided by the DOT and insurers, and insurers acting in compliance with the bill are not liable to any person for the disclosure of information supplied to the DOT or designated agent.

The designated agent is required to indemnify an insurer against any loss arising from a disclosure, provided the insurer supplied the information in compliance with the bill.

The bill takes effect July 1, 2019.

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