First Substitute S.B. 244

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Senate 3rd Reading Amendments 3-1-2012 cm/sch This document includes Senate 3rd Reading Floor Amendments incorporated into the bill on Thu, Mar 1, 2012 at 5:11 PM by cmillar. --> Senator Kevin T. Van Tassell proposes the following substitute bill:

1 REPORTING OPTIONS FOR AUTO INSURANCE
2 2012 GENERAL SESSION
3 STATE OF UTAH
4 Chief Sponsor: Kevin T. Van Tassell
5 House Sponsor: Bradley M. Daw
6
7 LONG TITLE
8 General Description:
9 This bill modifies the Insurance Code and Motor Vehicles Code by amending
10 provisions relating to motor vehicle insurance reporting.
11 Highlighted Provisions:
12 This bill:
13 . provides that certain insurers that issue motor vehicle coverage for certain motor
14 vehicles shall, upon request, provide to the Department of Public Safety's
15 designated agent verification of whether or not a motor vehicle insurance policy is
16 in effect for a specified vehicle;
17 . provides that the insurer shall provide the verification using an electronic service
18 established by the insurers, through the Internet, world wide web, or a similar
19 proprietary or common carrier electronic system that is compliant with certain
20 standards and requirements;
20a S. . provides that the Commissioner of Insurance may assess a fine against an
20b insurer for noncompliance;
20c .provides that under certain circumstances, the Commissioner shall excuse the fine; .S
21 . provides that the designated agent shall make available the verification information
22 provided by insurers to:
23 . state and local law enforcement agencies; and
24 . certain financial institutions;
25 . provides a July 1, S. [ 2015 ] 2016 .S sunset date; and

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Senate 3rd Reading Amendments 3-1-2012 cm/sch 26

. makes technical changes.
27 Money Appropriated in this Bill:
28 None
29 Other Special Clauses:
30 This bill takes effect on S. [ January ] July .S 1, 2013.
31 Utah Code Sections Affected:
32 AMENDS:
33 41-12a-803, as last amended by Laws of Utah 2011, Chapter 342
34 41-12a-805, as last amended by Laws of Utah 2009, Chapter 183
35 63I-2-231, as last amended by Laws of Utah 2011, Chapter 284
36 ENACTS:
37 31A-22-315.5, Utah Code Annotated 1953
38
39 Be it enacted by the Legislature of the state of Utah:
40 Section 1. Section 31A-22-315.5 is enacted to read:
41 31A-22-315.5. Motor vehicle insurance verification S. -- Penalty .S .
42 (1) (a) Except as provided in Subsections (1)(b) S. and in addition to the reporting
42a requirements under Section 31A-22-315 .S , each insurer that issues a policy that
43 includes motor vehicle liability coverage, uninsured motorist coverage, underinsured motorist
44 coverage, or personal injury coverage under this part shall, upon request, provide to the
45 Department of Public Safety's designated agent selected in accordance with Title 41, Chapter
46 12a, Part 8, Uninsured Motorist Identification Database Program, verification of whether or not
47 a motor vehicle insurance policy is in effect for a specified vehicle.
48 (b) An insurer that issues a policy that includes motor vehicle liability coverage,
49 uninsured motorist coverage, underinsured motorist coverage, or personal injury coverage
50 under this part is not required to provide verification of a motor vehicle insurance policy in
51 effect for a vehicle to the Department of Public Safety's designated agent under Subsection
52 (1)(a) if:
53 (i) the policy covers a vehicle that is registered under Section 41-1a-221 , 41-1a-222 , or
54 41-1a-301 ;
55 (ii) the policy covers a commercial motor vehicle; or
56 (iii) the insurer issues S. insurance for .S less than 500 motor S. [ vehicle liability
56a policies ] vehicles .S .

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Senate 3rd Reading Amendments 3-1-2012 cm/sch 57

(2) Each insurer shall provide the verification required under Subsection (1) using an
58 electronic service established by the insurers, through the Internet, world wide web, or a similar
59 proprietary or common carrier electronic system that:
60 (a) is compliant with:
61 (i) the specifications and standards of the Insurance Industry Committee on Motor
62 Vehicle Administration; and
63 (ii) other applicable industry standards;
64 (b) is available 24 hours a day, seven days a week, subject to reasonable allowances
65 for:
66 (i) scheduled maintenance; or
67 (ii) temporary system failures; and
68 (c) includes appropriate security measures, consistent with industry standards, to:
69 (i) secure its data against unauthorized access; and
70 (ii) maintain a record of all information requests.
70a S. (3) (a) The commissioner may, following procedures set forth in Title 63G, Chapter 4,
70b Administrative Procedures Act, assess a fine against an insurer of up to $250 for each day the
70c insurer fails to comply with this section.
70d (b) The commissioner shall excuse the fine if an insurer shows that the failure to
70e comply with this section was:
70f (i) inadvertent;
70g (ii) accidental; or
70h (iii) the result of excusable neglect. .S
71 Section 2. Section 41-12a-803 is amended to read:
72 41-12a-803. Program creation -- Administration -- Selection of designated agent
73 -- Duties -- Rulemaking -- Audits.
74 (1) There is created the Uninsured Motorist Identification Database Program to:
75 (a) establish an Uninsured Motorist Identification Database to verify compliance with
76 motor vehicle owner's or operator's security requirements under Section 41-12a-301 and other
77 provisions under this part;
78 (b) assist in reducing the number of uninsured motor vehicles on the highways of the
79 state;
80 (c) assist in increasing compliance with motor vehicle registration and sales and use tax
81 laws;
82 (d) assist in protecting a financial institution's bona fide security interest in a motor

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vehicle; and
84 (e) assist in the identification and prevention of identity theft and other crimes.
85 (2) The program shall be administered by the department with the assistance of the
86 designated agent and the Motor Vehicle Division.
87 (3) (a) The department shall contract in accordance with Title 63G, Chapter 6, Utah

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89 Identification Database for the purposes established under this part.
90 (b) The contract may not obligate the department to pay the third party more money
91 than is available in the account.
92 (4) (a) The third party under contract under this section is the department's designated
93 agent, and shall develop and maintain a computer database from the information provided by:
94 (i) insurers under Section 31A-22-315 ;
95 (ii) the division under Subsection (6); and
96 (iii) the Motor Vehicle Division under Section 41-1a-120 .
97 (b) (i) The database shall be developed and maintained in accordance with guidelines
98 established by the department so that state and local law enforcement agencies and financial
99 institutions as defined in Section 7-1-103 can efficiently access the records of the database,
100 including reports useful for the implementation of the provisions of this part.
101 (ii) (A) The reports shall be in a form and contain information approved by the
102 department.
103 (B) The reports may be made available through the Internet or through other electronic
104 medium, if the department determines that sufficient security is provided to ensure compliance
105 with Section 41-12a-805 regarding limitations on disclosure of information in the database.
106 (5) With information provided by the department and the Motor Vehicle Division, the
107 designated agent shall, at least monthly for submissions under Subsection 31A-22-315 (2)(b) or
108 at least twice a month for submissions under Subsection 31A-22-315 (2)(a):
109 (a) update the database with the motor vehicle insurance information provided by the
110 insurers in accordance with Section 31A-22-315 ; and
111 (b) compare all current motor vehicle registrations against the database.
112 (6) The division shall provide the designated agent with the name, date of birth,
113 address, and driver license number of all persons on the driver license database.
114 (7) In accordance with Title 63G, Chapter 3, Utah Administrative Rulemaking Act, the
115 department shall make rules and develop procedures in cooperation with the Motor Vehicle
116 Division to use the database for the purpose of administering and enforcing this part.
117 (8) (a) The designated agent shall archive computer data files at least semi-annually for
118 auditing purposes.

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120 shall audit the program at least every three years.
121 (c) The audit under Subsection (8)(b) shall include verification of:
122 (i) billings made by the designated agent; and
123 (ii) the accuracy of the designated agent's matching of vehicle registration with
124 insurance data.
125 (9) Upon request, the designated agent shall make available the information provided
126 by insurers under Section 31A-22-315.5 to:
127 (a) state and local law enforcement agencies; and
128 (b) financial institutions as defined in Section 7-1-103 .
129 Section 3. Section 41-12a-805 is amended to read:
130 41-12a-805. Disclosure of insurance information -- Penalty.
131 (1) Information in the database established under Section 41-12a-803 provided by a
132 person to the designated agent is considered to be the property of the person providing the
133 information.
134 (2) The information may not be disclosed from the database under Title 63G, Chapter
135 2, Government Records Access and Management Act, or otherwise, except as follows:
136 (a) for the purpose of investigating, litigating, or enforcing the owner's or operator's
137 security requirement under Section 41-12a-301 , the designated agent shall verify insurance
138 information through the state computer network for a state or local government agency or
139 court;
140 (b) for the purpose of investigating, litigating, or enforcing the owner's or operator's
141 security requirement under Section 41-12a-301 , the designated agent shall, upon request, issue
142 to any state or local government agency or court a certificate documenting the insurance
143 information, according to the database, of a specific individual or motor vehicle for the time
144 period designated by the government agency;
145 (c) upon request, the department or its designated agent shall disclose whether or not a
146 person is an insured individual and the insurance company name to:
147 (i) that individual or, if that individual is deceased, any interested person of that
148 individual, as defined in Section 75-1-201 ;
149 (ii) the parent or legal guardian of that individual if the individual is an unemancipated

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151 (iii) the legal guardian of that individual if the individual is legally incapacitated;
152 (iv) a person who has power of attorney from the insured individual;
153 (v) a person who submits a notarized release from the insured individual dated no more
154 than 90 days before the date the request is made; or
155 (vi) a person suffering loss or injury in a motor vehicle accident in which the insured
156 individual is involved, but only as part of an accident report as authorized in Section
157 41-12a-202 ;
158 (d) for the purpose of investigating, enforcing, or prosecuting laws or issuing citations
159 by state or local law enforcement agencies related to the:
160 (i) registration and renewal of registration of a motor vehicle under Title 41, Chapter
161 1a, Motor Vehicle Act;
162 (ii) purchase of a motor vehicle under Title 59, Chapter 12, Sales and Use Tax Act; and
163 (iii) owner's or operator's security requirements under Section 41-12a-301 ;
164 (e) upon request of a peace officer acting in an official capacity under the provisions of
165 Subsection (2)(d), the department or the designated agent shall, upon request, disclose relevant
166 information for investigation, enforcement, or prosecution;
167 (f) for the purpose of the state auditor, the legislative auditor general, or other auditor
168 of the state conducting audits of the program;
169 (g) upon request of a financial institution as defined under Section 7-1-103 for the
170 purpose of protecting the financial institution's bona fide security interest in a motor vehicle;
171 and
172 (h) upon the request of a state or local law enforcement agency for the purpose of
173 investigating and prosecuting identity theft and other crimes.
174 (3) (a) The department may allow the designated agent to prepare and deliver upon
175 request, a report on the insurance information of a person or motor vehicle in accordance with
176 this section.
177 (b) The report may be in the form of:
178 (i) a certified copy that is considered admissible in any court proceeding in the same
179 manner as the original; or
180 (ii) information accessible through the Internet or through other electronic medium if

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the department determines that sufficient security is provided to ensure compliance with this
182 section.
183 (c) The department may allow the designated agent to charge a fee established by the
184 department under Section 63J-1-504 for each:
185 (i) document authenticated, including each certified copy;
186 (ii) record accessed by the Internet or by other electronic medium; and
187 (iii) record provided to a financial institution under Subsection (2)(g).
188 (4) A person who knowingly releases or discloses information from the database for a
189 purpose other than those authorized in this section or to a person who is not entitled to it is
190 guilty of a third degree felony.
191 (5) An insurer is not liable to any person for complying with [Section] Sections
192 31A-22-315 and 31A-22-315.5 by providing information to the designated agent.
193 (6) Neither the state nor the department's designated agent is liable to any person for
194 gathering, managing, or using the information in the database as provided in [Section] Sections
195 31A-22-315 and 31A-22-315.5 and this part.
196 Section 4. Section 63I-2-231 is amended to read:
197 63I-2-231. Repeal dates, Title 31A.
198 (1) Section 31A-22-315.5 is repealed July 1, S. [ 2015 ] 2016 .S .
199 (2) Title 31A, Chapter 42, Defined Contribution Risk Adjuster Act, is repealed January
200 1, 2013.
201 Section 5. Effective date.
202 This bill takes effect on S. [ January ] July .S 1, 2013.