Bill Text: NY A05120 | 2023-2024 | General Assembly | Introduced
Bill Title: Establishes an online insurance verification system for proof of insurance; allows the use of third-party vendors and providers; requires motor vehicle insurers to provide policy information to the online verification system; establishes an online insurance verification advisory council; requires certain information to be confidential and proprietary information which is not subject to disclosure.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Introduced) 2024-01-03 - referred to transportation [A05120 Detail]
Download: New_York-2023-A05120-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 5120 2023-2024 Regular Sessions IN ASSEMBLY March 2, 2023 ___________ Introduced by M. of A. GUNTHER, HUNTER, D. ROSENTHAL -- read once and referred to the Committee on Transportation AN ACT to amend the vehicle and traffic law, in relation to establishing an online insurance verification system for proof of insurance; to establish an online insurance verification advisory council; and to repeal certain provisions of such law relating to motor vehicle insur- ance and funds for a certain pilot database system The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "New York state fairness for drivers act". 3 § 2. Paragraphs (a), (b), (c) and (d) of subdivision 2 and paragraphs 4 (a), (b), (c), (d), (f), (g), (h) and (i) of subdivision 4 of section 5 313 of the vehicle and traffic law are REPEALED. 6 § 3. Paragraph (d) of subdivision 3 of section 317 of the vehicle and 7 traffic law is REPEALED. 8 § 4. The vehicle and traffic law is amended by adding a new section 9 312-b to read as follows: 10 § 312-b. Online insurance verification system of motor vehicle insur- 11 ance. 1. The commissioner shall establish a system for the online 12 verification of insurance. Information available in the online insurance 13 verification system shall be provided by motor vehicle insurers pursuant 14 to section three hundred twelve-c of this article. Notwithstanding any 15 other provision of law or regulation to the contrary, the online insur- 16 ance verification system shall be the only verification system used to 17 verify evidence of mandatory vehicle insurance as required by section 18 three hundred twelve of this article. The commissioner shall consult 19 with representatives of the insurance industry and private service 20 providers in determining the objectives, details and deadlines related 21 to the online insurance verification system. 22 2. The online insurance verification system shall include, at a mini- 23 mum, the ability to: 24 (a) send requests to insurers for verification of evidence of insur- 25 ance via web services established by the insurers, through the internet, EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD08325-02-3A. 5120 2 1 or a similar proprietary or common carrier electronic system, in compli- 2 ance with the specifications and standards of the insurance industry 3 committee on motor vehicle administration; 4 (b) include appropriate provisions to secure data against unauthorized 5 access and the department shall maintain a historical record of the 6 system data for six to twelve months from the date of all requests and 7 responses; 8 (c) be utilized for verification of the evidence of mandatory liabil- 9 ity insurance coverage as prescribed by the laws of the state and shall 10 be accessible to authorized personnel of the department, the courts, law 11 enforcement, and any other entities authorized by the state as permitted 12 by any state or federal privacy laws, and the online insurance verifica- 13 tion system shall be interfaced, wherever appropriate, with existing 14 state systems; 15 (d) include information which shall enable the department to make 16 inquiries to insurers for evidence of insurance that is consistent with 17 the insurance industry committee on motor vehicle administration recom- 18 mendations, including specifications and standards that utilize multiple 19 data elements for greater matching accuracy from the national associ- 20 ation of insurance commissioners, vehicle identification numbers, policy 21 numbers, or as described in the specifications and standards of the 22 insurance industry committee on motor vehicle administration; and 23 (e) respond to each request for insurance information within a reason- 24 able amount of time which shall be determined by the commissioner and 25 the online insurance verification system shall be capable of responding 26 within the time established. 27 3. The commissioner, in conjunction with the superintendent of state 28 police and local law enforcement officials, shall formulate a means to 29 allow the online insurance verification system to be easily accessible 30 to on-duty law enforcement personnel in the performance of their offi- 31 cial duties for the purpose of verifying whether an operator of a motor 32 vehicle maintains proper insurance coverage and to increase compliance 33 with the motor vehicle financial security laws under this article and 34 article eight of this title. 35 4. (a) The commissioner shall develop a computer bar code system that 36 can be imprinted on a vehicle registration sticker or on a sticker to be 37 affixed to the insured's license plate either simultaneously or after 38 the online insurance verification system has been established. 39 (b) Such computer bar code shall enable authorized persons in the 40 performance of their official duties to access information such as the 41 registrant's name, vehicle identification number, name of insurer, 42 current status of premium payment, driver's license number, vehicle 43 registration number and other information that the commissioner deems 44 necessary to implement the provisions of this section. The commissioner 45 in developing such bar code system shall enable authorized persons in 46 the performance of their official duties to access only such information 47 that is necessary to detect uninsured motor vehicles or accomplish other 48 goals clearly established and authorized by law. Such system shall be 49 designed to protect the personal privacy interests of motorists, and 50 shall at a minimum include security features used in PDF417 technology 51 or greater. 52 5. (a) Nothing in this section shall prohibit the commissioner from 53 contracting with a private service provider or providers who have 54 successfully implemented similar online insurance verification systems 55 in other states or to assist in establishing and maintaining such system 56 in this state.A. 5120 3 1 (b) The commissioner and any private service provider shall each sepa- 2 rately maintain a contact person for insurers during the establishment, 3 implementation and operation of the online insurance verification 4 system. 5 6. The commissioner shall publish for comment and then post a detailed 6 guide of the online insurance verification system on the department's 7 website. 8 7. Within two years after the online insurance verification system is 9 installed and fully operational, the commissioner, after consultation 10 with insurers, shall prepare and submit to the governor, the temporary 11 president of the senate, the speaker of the assembly, the minority lead- 12 er of the senate and the minority leader of the assembly a report 13 containing the costs of the online insurance verification system 14 incurred by the department, insurers and the public and the effective- 15 ness of the such system in reducing the number of uninsured motor vehi- 16 cles. 17 8. The online insurance verification system shall be installed and 18 fully operational within eighteen months after the effective date of 19 this section and shall undergo an appropriate testing and pilot period 20 of not less than nine months. Until the successful completion of the 21 testing and pilot period, no enforcement action shall be taken based on 22 the online insurance verification system. 23 9. Notwithstanding any other provision of law or regulation to the 24 contrary, the provisions to secure data against unauthorized access 25 required pursuant to paragraph (b) of subdivision two of this section 26 shall require the following: 27 (a) The information obtained by the department pursuant to this 28 section shall be deemed confidential and proprietary information and 29 shall not be deemed to be a public record subject to disclosure pursuant 30 to the public officers law. 31 (i) Such information shall not be used, sold, accessed, utilized in 32 any manner or released by the department to any person, corporation, or 33 state and local agency, unless explicitly authorized to be released to 34 parties that are entitled to such information pursuant to this section. 35 (ii) Such information may be released to another state or local agency 36 or other persons if the department, insurer and attorney general all 37 consent to the release of a certain type, class or classification of 38 information. 39 (iii) The department shall institute appropriate measures to ensure 40 that only authorized persons are permitted to access such information 41 for the purposes specified by this section. 42 (b) Persons who knowingly release or disclose information from the 43 online insurance verification system for a purpose other than those 44 described as authorized by this section or to a person not entitled to 45 receive it shall be guilty of a misdemeanor for each such release or 46 disclosure. 47 (c) The department shall continue to release information that it 48 currently discloses to the public such as motor vehicle registration and 49 title abstracts, other reports concerning a motor vehicle operators' 50 driving history and insurance claims history, and information to a 51 person or persons suffering a loss or injury due to a motor vehicle 52 accident in which an insured individual was involved. 53 § 5. The vehicle and traffic law is amended by adding a new section 54 312-c to read as follows: 55 § 312-c. Insurer responsibilities for the online insurance verifica- 56 tion system. 1. (a) Insurers shall coordinate with the commissioner inA. 5120 4 1 establishing and maintaining the online insurance verification system 2 established pursuant to section three hundred twelve-b of this article, 3 and shall provide access to motor vehicle insurance policy status infor- 4 mation as provided by any rules and regulations promulgated by the 5 commissioner. 6 (b) Every insurer that is licensed to issue motor vehicle insurance 7 policies or is authorized to do business in the state shall comply with 8 this section and section three hundred twelve-b of this article for 9 verification of evidence of vehicle insurance for every vehicle insured 10 by that insurer in the state as required by the rules and regulations 11 promulgated by the commissioner. 12 (c) Insurers shall maintain a historical record of the online insur- 13 ance verification system data for a maximum period of six months from 14 the date any request and response is made. 15 (d) Insurers shall respond to requests from the online insurance 16 verification system within the time period prescribed by the specifica- 17 tions and standards set by the insurance industry committee on motor 18 vehicle administration. 19 2. (a) Insurers shall provide commercial automobile customers with 20 documentation that the vehicle is insured under a commercial auto poli- 21 cy. Documentation shall be an insurance identification card clearly 22 marked in the title with the following, "Commercial Auto Insurance Iden- 23 tification Card". 24 (b) For the purposes of this subdivision, "commercial auto coverage" 25 shall be defined as any coverage provided to an insured, regardless of 26 the number of vehicles or entity covered under the commercial auto 27 coverage and rated from a commercial manual approved by the department 28 of financial services. 29 3. Nothing in this section shall prohibit an insurer from using the 30 services of a third-party vendor or provider in order to comply with the 31 online insurance verification system required by sections three hundred 32 twelve and three hundred twelve-b of this article. 33 4. The commissioner may promulgate any rules and regulations necessary 34 to accommodate insurers that write a limited number of policies in the 35 state and such insurers that would be unduly burdened by this section. 36 § 6. a. There is hereby established an online insurance verification 37 advisory council. It shall consist of 14 voting members to be appointed 38 as follows: the commissioner of the department of motor vehicles or his 39 or her duly designated representative, the superintendent of financial 40 services or his or her duly designated representative, the superinten- 41 dent of the New York State Police or his or her duly designated repre- 42 sentative; and eleven at-large members, of which, two members shall be 43 appointed by the governor, two members shall be appointed by the tempo- 44 rary president of the senate, two members shall be appointed by the 45 speaker of the assembly, one member shall be appointed by the minority 46 leader of the senate, one member shall be appointed by the minority 47 leader of the assembly, as well as three insurance company represen- 48 tatives, one appointed by the New York Insurance Association, one 49 appointed by the American Property and Casualty Insurance Association, 50 and one appointed by the National Association of Mutual Insurance Compa- 51 nies. The commissioner of the department of motor vehicles, or his or 52 her duly designated representative, shall serve as chairperson of the 53 advisory council. The eleven appointed members shall serve at the pleas- 54 ure of the appointing official or organization. Vacancies shall be 55 filled in the manner provided for original appointments.A. 5120 5 1 b. The members of the advisory council shall receive no compensation 2 for their services. 3 c. Notwithstanding any inconsistent provision of any general, special 4 or local law, ordinance, resolution or charter, no officer, member or 5 employee of the state or of any public corporation shall forfeit his or 6 her office or employment by reason of his or her acceptance of appoint- 7 ment as a member of the advisory council, nor shall service as such 8 council member be deemed incompatible or in conflict with such office or 9 employment. 10 d. The advisory council is charged with the following duties: 11 (1) Facilitate the implementation of the online insurance verification 12 system; 13 (2) Develop a guide for insurers providing data and other information 14 necessary for compliance along with other necessary regulations; 15 (3) Coordinate and conduct a testing phase; 16 (4) Identify necessary changes during the testing phase; and 17 (5) Issue recommendations based on periodic reviews of the online 18 insurance verification system. 19 e. The advisory council may request and shall receive from any subdi- 20 vision, department, board, commission, office, agency, or other instru- 21 mentality of the state or of any political subdivision thereof such 22 facilities, assistance and data as it deems necessary or desirable for 23 the proper execution of its powers and duties and to effectuate the 24 purposes set forth in this act. 25 § 7. Subdivision 1 of section 312 of the vehicle and traffic law is 26 amended by adding a new paragraph (c) to read as follows: 27 (c) When the department has evidence that a motor vehicle has been or 28 is currently being operated without insurance, the owner's vehicle 29 registration may be suspended or revoked. The current registration shall 30 not be reinstated and new registration shall not be issued unless 31 evidence of insurance has been provided to the department and any appli- 32 cable reinstatement fees as prescribed by the department have been paid. 33 Any applicable fees are in addition to any other fines, penalties and 34 fees required by law. 35 § 8. Subdivision 1 of section 312-a of the vehicle and traffic law, as 36 amended by chapter 781 of the laws of 1983, is amended to read as 37 follows: 38 1. Upon issuance of an owner's policy of liability insurance or other 39 financial security required by this chapter, an insurer shall issue 40 proof of insurance in accordance with the regulations promulgated by the 41 commissioner pursuant to [paragraph (b) of subdivision two of section] 42 sections three hundred [thirteen] twelve-b and three hundred twelve-c of 43 this article. 44 § 9. This act shall take effect immediately; provided, however, 45 sections two and three of this act shall take effect when the online 46 insurance verification system is installed and fully operational pursu- 47 ant to subdivision 8 of section 312-b of the vehicle and traffic law, as 48 added by section four of this act; and provided further, sections four, 49 five, seven and eight of this act shall take effect one year after it 50 shall have become a law. Effective immediately, the addition, amendment 51 and/or repeal of any rule or regulation necessary for the implementation 52 of this act on its effective date are authorized to be made on or before 53 such date.
