Bill Text: NY S09844 | 2023-2024 | General Assembly | Introduced


Bill Title: Establishes an online insurance verification system for motor vehicle insurance; requires insurers to provide necessary information.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-06-04 - REFERRED TO RULES [S09844 Detail]

Download: New_York-2023-S09844-Introduced.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                          9844

                    IN SENATE

                                      June 4, 2024
                                       ___________

        Introduced  by  Sen. BRESLIN -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules

        AN ACT to amend the vehicle and traffic law, in relation to establishing
          an online insurance verification system for motor vehicle insurance

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Subdivisions 2, 3 and 4 of section 313 of the vehicle and
     2  traffic law, subdivision 2 as amended by chapter  678  of  the  laws  of
     3  1997,  paragraphs (a), (b) and (d) of subdivision 2 and subdivision 4 as
     4  amended by chapter 509 of the laws of 1998, paragraph (b) of subdivision
     5  4 as amended by chapter 161 of the laws of 2004, paragraph (d) of subdi-
     6  vision 4 as further amended by section 104 of part A of  chapter  62  of
     7  the laws of 2011, subdivision 3 as amended by chapter 781 of the laws of
     8  1983, are amended to read as follows:
     9    2.  (a)  [Upon] Except as otherwise provided in sections three hundred
    10  twelve-b and three hundred twelve-c of this article, the termination  of
    11  an  owner's  policy of liability insurance, other than an owner's policy
    12  of liability insurance for a motorcycle, at the request of  the  insured
    13  or  by  cancellation  by the insurer, the insurer shall file a notice of
    14  termination with reference to such policy, as  opposed  to  any  insured
    15  vehicle  or  vehicles under such policy, with the commissioner not later
    16  than thirty days following the effective date of  such  cancellation  or
    17  other  termination, in accordance with the regulations required by para-
    18  graph (c) of this subdivision. An insurer shall not  file  a  notice  of
    19  termination  with  the  commissioner except as required by this subdivi-
    20  sion.
    21    (b) [Upon] Except as otherwise  provided  in  sections  three  hundred
    22  twelve-b  and  three hundred twelve-c of this article, upon the issuance
    23  of an owner's policy of liability insurance the  insurer  shall  file  a
    24  notice  or  confirmation  of  issuance with reference to such policy not
    25  later than fourteen days following the effective date of such  issuance,
    26  and  not later than seven days following the effective date for policies
    27  issued after January first, two thousand one,  in  accordance  with  the
    28  regulations required by paragraph (c) of this subdivision.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10946-06-4

        S. 9844                             2

     1    (c)  The commissioner shall promulgate regulations establishing proce-
     2  dures for issuance of  proof  of  insurance  and,  except  as  otherwise
     3  provided  in  sections three hundred twelve-b and three hundred twelve-c
     4  of this article, for reporting by insurers of notices of termination and
     5  policy  issuance,  either electronically or by paper copy, at the option
     6  of the department. Such reporting or, if required pursuant  to  sections
     7  three  hundred twelve-b and three hundred twelve-c of this article, such
     8  online verification shall be required for every cancellation  or  termi-
     9  nation  which  is  effective  on  or  after July first, nineteen hundred
    10  eighty-four and for every policy issuance which is effective on or after
    11  January first, two thousand[; provided, however, that should the commis-
    12  sioner find, after testing of reporting procedures,  that  it  would  be
    13  feasible  to require reporting for policy cancellations, terminations or
    14  issuances effective on an earlier date, he may by regulation so  require
    15  reporting  on  such  earlier  date,  but  in no event shall reporting be
    16  required for cancellations or terminations effective prior  to  February
    17  first,  nineteen  hundred eighty-four nor for policy issuances effective
    18  prior to September first, nineteen hundred ninety-nine.  Insurers  shall
    19  cooperate  fully  with the commissioner in any such testing of reporting
    20  procedures].
    21    (d) Upon application by an insurer, the commissioner  may  extend  the
    22  period  for filing of notices of termination by such insurer pursuant to
    23  paragraph (c) of this subdivision for up to fifteen days, and for  seven
    24  days for policies issued by an insurer.  Extensions shall not be granted
    25  unless  the insurer demonstrates to the satisfaction of the commissioner
    26  that compliance with the notice period would result in substantial hard-
    27  ship to the insurer. The commissioner shall maintain a  list  of  exten-
    28  sions granted pursuant to this paragraph.
    29    (e)  Notwithstanding  the provisions of paragraphs (b), (c) and (d) of
    30  this subdivision, the commissioner may, in lieu  of  promulgating  regu-
    31  lations for reporting by insurers to the department of notices of termi-
    32  nation and policy issuance either electronically or by paper copy pursu-
    33  ant  to  such  paragraphs,  promulgate  regulations pursuant to sections
    34  three hundred twelve-b and three hundred twelve-c of this article estab-
    35  lishing procedures for online verification by motor vehicle insurers  of
    36  motor vehicle owners' policies of liability insurance to the department.
    37    3.  A  cancellation  or termination for which notice is required to be
    38  filed with the commissioner pursuant to subdivision two of this  section
    39  or  which  must  be  verified  online pursuant to sections three hundred
    40  twelve-b and three hundred twelve-c of this article shall not be  effec-
    41  tive with respect to persons other than the named insured and members of
    42  the  insured's  household  until  the insurer has filed a notice thereof
    43  with the commissioner  or  verified  such  cancellation  or  termination
    44  online,  as  applicable,  or until another insurance policy covering the
    45  same risk has been procured, except that a notice filed with the commis-
    46  sioner, in the format prescribed by the commissioner, within the  period
    47  prescribed  in  subdivision  two of this section, or a verification made
    48  online in compliance with sections  three  hundred  twelve-b  and  three
    49  hundred  twelve-c  of  this  article,  shall be effective as of the date
    50  certified therein, regardless of whether a suspension  order  is  issued
    51  pursuant  to  section  three hundred eighteen of this article. A receipt
    52  from the department stating that a notice of termination has been  filed
    53  shall  be  deemed  conclusive  evidence of such filing. An insurer shall
    54  cooperate with the commissioner in attempting to identify persons not in
    55  compliance with this article in cases where the information reported  by

        S. 9844                             3

     1  the  insurer  does not correspond with records maintained by the depart-
     2  ment.
     3    4.  Notwithstanding any other provision of this article to the contra-
     4  ry, the commissioner shall establish a [pilot] program  to  maintain  an
     5  up-to-date  insured vehicle identification database to assist in identi-
     6  fying uninsured motor  vehicles.  Such  [databases]  database  shall  be
     7  implemented  by  the  department pursuant to standards prescribed by the
     8  commissioner or an agent designated by the commissioner which shall seek
     9  technical assistance from affected insurers and the New York  Automobile
    10  Insurance  Plan.  This  program  shall utilize all information collected
    11  pursuant to this section or pursuant to sections three hundred  twelve-b
    12  and  three  hundred  twelve-c of this article and shall also include the
    13  following elements:
    14    (a) In addition to and in conjunction with either  the  provisions  of
    15  subdivision  two  of  this  section  or the provisions of sections three
    16  hundred twelve-b and three hundred twelve-c of  this  article,  insurers
    17  that  write  private  passenger or commercial motor vehicle insurance in
    18  this state shall also submit to the  department,  either  electronically
    19  [or],  by  paper  copy  or, if established pursuant to the provisions of
    20  section three hundred twelve-b of this article, by online  verification,
    21  at the option of the department, information that identifies those poli-
    22  cies  that  have been cancelled, terminated or non-renewed and all poli-
    23  cies that have been issued, the date when such insurance lapses, and any
    24  other information that the commissioner deems necessary  to  efficiently
    25  identify   and  track  uninsured  vehicles  in  this  state  such  as  a
    26  policyholder's address, policy number, vehicle registration number,  and
    27  vehicle  identification  number.  The  department  may  exempt from such
    28  [pilot] program the transfer of information on  certain  classifications
    29  of  vehicles that are in the opinion of the department generally insured
    30  and which it is difficult to identify  uninsured  vehicles  within  such
    31  classification, such as large commercial vehicle fleets;
    32    (b)  [The]  Except  as  otherwise  provided  in  section three hundred
    33  twelve-b of this article, the department shall  forward  to  each  motor
    34  vehicle  insurer,  at  such times as deemed necessary and appropriate by
    35  the commissioner, a listing of all the registrants the department has on
    36  file as insured with that insurer. Such insurer shall  then  review  the
    37  listing  within  thirty days of receipt of the listing and report to the
    38  department which of the registrants the insurer does not insure;
    39    (c) The commissioner shall, in conjunction with the superintendent  of
    40  state  police  and  local law enforcement officials formulate a means to
    41  allow such database established pursuant to this subdivision to be easi-
    42  ly accessible to on-duty law enforcement personnel in the performance of
    43  their official duties for the purpose of verifying whether  an  operator
    44  maintains  proper insurance coverage and to increase compliance with the
    45  motor vehicle financial security laws under  this  article  and  article
    46  eight of this title;
    47    (d) In developing the mechanism to electronically transfer information
    48  to  the  department  pursuant  to  this  section or, at the department's
    49  option, pursuant to sections three hundred twelve-b  and  three  hundred
    50  twelve-c of this article, the commissioner shall consult with the super-
    51  intendent  of  financial  services  and insurers to adopt a standardized
    52  system of organizing, recording and transferring such information so  as
    53  to  minimize  insurer administrative expenses. The commissioner shall to
    54  the maximum extent possible  utilize  nationally  recognized  electronic
    55  data  information  systems  such  as  those  developed  by  the American

        S. 9844                             4

     1  National Standards Institute or the American Association of Motor  Vehi-
     2  cle Administrators;
     3    (e)(1) Either simultaneously or after the up-dated database system has
     4  been  established,  the  commissioner shall develop a computer indicator
     5  that can be imprinted on a vehicle registration sticker or on a  sticker
     6  to  be  affixed  to  the  insured's license plate. Such indicator system
     7  shall enable law enforcement personnel and other authorized persons when
     8  acting in the course of their official duties to access the department's
     9  database so that such persons can ascertain whether a vehicle is proper-
    10  ly insured or not insured;
    11    (2) Such computer indicator system shall enable authorized persons  in
    12  the  performance  of their official duties to access information such as
    13  the registrant's name, vehicle identification number, name  of  insurer,
    14  current  status  of  insurance,  vehicle  registration  number and other
    15  information that the  commissioner  deems  necessary  to  implement  the
    16  provisions  of  this  section  or section three hundred twelve-b of this
    17  article.  The commissioner in developing such computer indicator  system
    18  shall  enable  authorized  persons  in the performance of their official
    19  duties to access only such information that is necessary to detect unin-
    20  sured motor vehicles or accomplish other goals clearly  established  and
    21  authorized  by  law. Such computer indicator system shall be designed to
    22  protect the personal privacy interests of motorists;
    23    (f) The commissioner shall maintain [an] the insured vehicle  database
    24  system  [that  is  accurate  to within a period of fourteen days] estab-
    25  lished pursuant to this subdivision  and  a  computer  indicator  system
    26  described  in  paragraph  (e)  of  this  subdivision [within twenty-four
    27  months of the effective date of this subdivision and] that are  accurate
    28  to  within  seven  days [by January first, two thousand one. The commis-
    29  sioner shall submit to the legislature a report within  eighteen  months
    30  from  the date this subdivision takes effect which outlines the progress
    31  being made to implement such database  and  computer  indicator  system.
    32  After such database and computer indicator system is established and put
    33  into  operation,  the  commissioner  shall  make  recommendations to the
    34  legislature to alter, minimize or eliminate the need for the issuance of
    35  insurance identification cards, simplify the requirements to demonstrate
    36  proof of financial  security  and  certificate  of  insurance  currently
    37  required  by  this  article, eliminate the requirement for production of
    38  proof of financial security to accompany applications for  registrations
    39  or  renewals  thereof  provided  that  such  database indicates that the
    40  registrant is insured, and the repeal or modification of  section  three
    41  hundred  twelve-a  of  this  article.  The  commissioner shall also make
    42  recommendations to the legislature to streamline and shorten the  notice
    43  termination  requirements  of  subdivisions  one,  two and three of this
    44  section and section three hundred eighteen of this article. Such  report
    45  shall be submitted to the legislature within twelve months from the date
    46  such database and indicator system has been implemented];
    47    (g)  [To  minimize  the  cost of this program, the commissioner, if he
    48  deems it necessary and prudent, can initially limit the  scope  of  this
    49  project to a select number of vehicle classifications or insurers;
    50    (h)]  Notwithstanding any other provision of law, information obtained
    51  by the department pursuant to this section and  sections  three  hundred
    52  twelve-b  and  three  hundred  twelve-c  of  this  article  shall not be
    53  disclosed, used, sold, accessed, utilized in any manner or  released  by
    54  the  department  to  any person, corporation, or state and local agency,
    55  except in response to a specific, individual request for  such  informa-
    56  tion  authorized pursuant to the federal driver's privacy protection act

        S. 9844                             5

     1  (18 U.S.C. 2721 et.seq.). The department  shall  institute  measures  to
     2  ensure  that only authorized persons are permitted to access such infor-
     3  mation for the purposes specified by  this  section  and  section  three
     4  hundred  twelve-b  of  this  article.   Persons who knowingly release or
     5  disclose information from such database for a purpose other  than  those
     6  described  as  authorized by this section or to a person not entitled to
     7  receive it shall be guilty of a misdemeanor for  each  such  release  or
     8  disclosure[; and
     9    (i)  The  commissioner may postpone implementation of such pilot data-
    10  base and computer indicator system for a period of time  not  to  exceed
    11  eighteen  months  if  he or she determines that the program is not ready
    12  for implementation. Should the commissioner determine that  such  system
    13  cannot  be  implemented  during  the eighteen months extension, then the
    14  commissioner shall report  to  the  legislature  the  reasons  why  such
    15  program  cannot  be  implemented  and request that the law be amended to
    16  delay its implementation date].
    17    § 2. The vehicle and traffic law is amended by adding  a  new  section
    18  312-b to read as follows:
    19    §  312-b. Online insurance verification system of motor vehicle insur-
    20  ance. 1. The commissioner may establish a system for the online  verifi-
    21  cation  of motor vehicle owners' policies of liability insurance. Infor-
    22  mation available in the online insurance verification  system  shall  be
    23  provided to the commissioner by motor vehicle insurers pursuant to rules
    24  and  regulations  promulgated  by  the commissioner, if the commissioner
    25  determines establishment of such system would further  the  purposes  of
    26  this  article  as  set forth in subdivision two of section three hundred
    27  ten of this article.
    28    2. Where the commissioner establishes a system for the online  verifi-
    29  cation  of  owners'  policies  of  liability  insurance pursuant to this
    30  section, the commissioner shall verify motor vehicle owners' policies of
    31  liability insurance and maintain such system of online  verification  of
    32  owners'  policies  of  liability  insurance that is accurate to within a
    33  period of no less than seven days, and  shall  develop,  implement,  and
    34  maintain security features to protect the security, confidentiality, and
    35  integrity  of  such system's information and data and provide safeguards
    36  necessary or appropriate to preclude unauthorized access to such  infor-
    37  mation and data.
    38    3.  The online insurance verification system shall, at a minimum, have
    39  the ability:
    40    (a) for the department to send requests to motor vehicle insurers  for
    41  verification  of evidence of a motor vehicle owner's policy of liability
    42  insurance as prescribed by this chapter via web  services,  through  the
    43  internet,  or a similar proprietary or common carrier electronic system,
    44  as well as to  receive  from  motor  vehicle  insurers  verification  of
    45  evidence  of  a motor vehicle owner's policy of liability insurance in a
    46  form and manner as determined by the commissioner;
    47    (b) to be utilized by the commissioner for verification  of  mandatory
    48  motor  vehicle  liability insurance coverage as prescribed by this chap-
    49  ter;
    50    (c) to enable the commissioner to  make  inquiries  to  motor  vehicle
    51  insurers  for  evidence  of  motor vehicle owners' policies of liability
    52  insurance including, but not limited to, policyholders' addresses, poli-
    53  cy numbers, vehicle registration  numbers,  and  vehicle  identification
    54  numbers;

        S. 9844                             6

     1    (d)  to  respond to each request by the commissioner for motor vehicle
     2  liability insurance information within an amount of time  determined  by
     3  the commissioner; and
     4    (e) to respond within the time established.
     5    4.  If  the   commissioner implements an online insurance verification
     6  system pursuant to this section, such system (a) shall not be accessible
     7  except to the commissioner and to insurers to the  extent  necessary  to
     8  comply  with  the  provisions  of this section and section three hundred
     9  twelve-c of this article, and (b) shall undergo an  appropriate  testing
    10  and  pilot  period  of  not  less  than one year after which, should the
    11  commissioner determine to proceed with such online  insurance  verifica-
    12  tion  system, the commissioner shall certify in writing to the governor,
    13  the temporary president of the senate, and the speaker of  the  assembly
    14  that such system is fully operational.
    15    §  3.  The  vehicle and traffic law is amended by adding a new section
    16  312-c to read as follows:
    17    § 312-c. Insurer responsibilities for the online  insurance  verifica-
    18  tion  system.    Where an online insurance verification system is estab-
    19  lished pursuant to section three hundred twelve-b of this article:
    20    1. every motor vehicle insurer shall  provide  the  commissioner  with
    21  access  to  its motor vehicle liability insurance policy status informa-
    22  tion as provided by, and consistent with any time frames established by,
    23  any rules and regulations promulgated by the commissioner; and
    24    2. every insurer that is licensed to  issue  motor  vehicle  insurance
    25  policies or is authorized to do business in this state shall comply with
    26  this  section  and  section  three  hundred twelve-b of this article for
    27  verification of evidence of motor vehicle liability insurance for  every
    28  vehicle insured by that insurer in this state, as required by this chap-
    29  ter and the rules and regulations promulgated by the commissioner there-
    30  under.
    31    §  4. Paragraph (d) of subdivision 3 of section 317 of the vehicle and
    32  traffic law, as added by chapter 678 of the laws of 1997, is amended  to
    33  read as follows:
    34    (d)  To  fully  fund such [pilot] database system and bar code program
    35  established pursuant to subdivision four of section three hundred  thir-
    36  teen  of  this  article and, where established pursuant to section three
    37  hundred twelve-b of this article,  such  online  insurance  verification
    38  system,  the  commissioner  shall utilize the following three sources of
    39  revenue: (1) twenty-five percent of all  civil  penalties  imposed  upon
    40  persons  fined pursuant to paragraph (b) of subdivision one-a of section
    41  three hundred eighteen of this article, (2) monies obtained from  grants
    42  that may be awarded to the commissioner from the motor vehicle theft and
    43  insurance  fraud  prevention fund, and (3) pro rata assessments upon all
    44  insurance carriers subject to the provisions of this section in  propor-
    45  tion to the premium estimates filed by such carriers.
    46    § 5. This act shall take effect on the one hundred twentieth day after
    47  it shall have become a law.  Effective immediately, the addition, amend-
    48  ment and/or repeal of any rule or regulation necessary for the implemen-
    49  tation  of this act are authorized to be made and completed on or before
    50  such effective date.
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