February 13, 2018, Introduced by Senator ZORN and referred to the Committee on Insurance.
A bill to establish a system for electronic verification of
automobile insurance; to require automobile insurers to provide
policy information for the electronic verification system; to
provide for the powers and duties of state governmental officers
and entities; and to require the promulgation of rules.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the "real-
time electronic insurance verification act".
Sec. 2. As used in this act:
(a) "Automobile insurance" means insurance required under
section 3101 or 3103 of the insurance code of 1956, 1956 PA 218,
MCL 500.3101 and 500.3103.
(b) "Commercial auto coverage" means any coverage provided to
an insured, regardless of the number of vehicles or entity covered,
under a commercial coverage form and rated from a commercial manual
approved by the department.
(c) "Department" means the department of insurance and
financial services, unless expressly stated otherwise.
(d) "IICMVA" means the Insurance Industry Committee on Motor
Vehicle Administration.
(e) "Online" means through the internet, the World Wide Web,
or a similar proprietary or electronic system based on a
telecommunication provider, as that term is defined in section 102
of the Michigan telecommunications act, 1991 PA 179, MCL 484.2102.
Sec. 3. (1) The department shall promulgate rules under the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328, to establish a system for online verification of evidence
of automobile insurance. The verification system must do all of the
following:
(a) Send requests to insurers for verification of evidence of
insurance online and using services established by the insurers, in
compliance with the specifications and standards of the IICMVA,
with enhancements, additions, and modification as required by the
department. The system must require insurers to provide information
about the issuance, renewal, cancellation, and nonrenewal of
automobile insurance immediately, or effectively in real time.
(b) Include appropriate provisions to secure its data against
unauthorized access. The department shall maintain a historical
record of the system data for 6 to 12 months after the date of a
request or response.
(c) Receive motor vehicle liability insurance data file
transfers from insurers under specifications and standards
established by the department to identify automobiles that are not
covered by a liability insurance policy and to facilitate requests
to insurers for verification of evidence of insurance online.
(d) Include information that will enable the department to
make inquiries to insurers about evidence of insurance that is
consistent with insurance industry and IICMVA recommendations,
specifications, and standards by using multiple data elements for
greater matching accuracy, specifically the National Association of
Insurance Commissioners insurance company code, the vehicle
identification number, the policy number, or elements as described
in the specifications and standards of the IICMVA, with
enhancements, additions, and modifications as required by the
department.
(e) Not require insurers to verify evidence of insurance
online for vehicles insured under commercial auto coverage.
However, the department shall require insurers of vehicles insured
under commercial auto coverage to provide liability insurance data
file transfers to the department for the vehicles, but shall not
require vehicle identification numbers for nonvehicle specific
policies or if the vehicle identification number is not captured by
the insurer.
(f) Not require the verification of any of the following:
(i) A motor vehicle owned and operated by the United States or
an agency of the United States or of this state or a political or
governmental subdivision of this state.
(ii) A motor vehicle that is subject to the supervision and
regulation of the Federal Motor Carrier Safety Administration or
the public service commission and for which the owner or operator
has filed evidence of financial responsibility, the liability under
which is not less than that required of the operator of a motor
vehicle under the insurance code of 1956, 1956 PA 218, MCL 500.100
to 500.8302.
(iii) A motor vehicle covered by a certificate of self-
insurance issued by the department.
(iv) A motor vehicle owned by a licensed motor vehicle dealer
and held in inventory that is covered by a blanket liability
insurance policy or commercial automobile liability insurance
policy.
(v) A vehicle properly registered in another jurisdiction and
not legally required to be registered under the Michigan vehicle
code, 1949 PA 300, MCL 257.1 to 257.923.
(g) Assist in the identification of uninsured motorists in the
most effective way possible.
(2) The system established under this section must be used
only for verification of evidence of mandatory automobile
insurance, must be accessible to authorized personnel of the
department, the department of state, the department of health and
human services, the courts, law enforcement personnel, and any
other entities authorized by this state as permitted by privacy
laws of this state or federal privacy laws, and must be interfaced,
wherever appropriate, with existing state systems.
(3) The department may contract with 1 or more private service
providers that have successfully implemented similar systems in
other states to assist in establishing and maintaining the system
as required under this section.
Sec. 4. (1) An insurer that issues automobile liability
insurance policies in this state shall establish and maintain a
system to perform the functions required to be performed by the
insurer under this act, including the ability to respond within the
time period prescribed by IICMVA specifications and standards.
(2) An insurer that issues automobile liability insurance
policies in this state shall provide access to automobile insurance
policy status information as required by the rules promulgated
under this act.
(3) An insurer that issues automobile liability insurance
policies in this state shall respond to a request for verification
of automobile insurance if the request is for a date that is within
6 months before the date of the request.
(4) An insurer may use the services of a third party vendor to
establish and maintain the insurance verification program required
under this act.
Sec. 8. (1) This act takes effect on January 1, 2019.
(2) The verification system required under this act must be
installed and fully operational by July 1, 2019, following an
appropriate testing and pilot period. The director of the
department shall post a certification on the department website
stating that the system is operational when the system is
operational.
Enacting section 1. This act does not take effect unless
Senate Bill No. 820
of the 99th Legislature is enacted into law: