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First Substitute S.B. 244

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;
             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, 2015 sunset date; and


             26          .    makes technical changes.
             27      Money Appropriated in this Bill:
             28          None
             29      Other Special Clauses:
             30          This bill takes effect on January 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.
             42          (1) (a) Except as provided in Subsections (1)(b), 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 less than 500 motor vehicle liability policies.


             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.
             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
             83      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


             88      Procurement Code, with a third party to establish and maintain an Uninsured Motorist
             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.


             119          (b) The internal audit unit of the tax commission provided under Section 59-1-206
             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


             150      minor;
             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


             181      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, 2015.
             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 January 1, 2013.


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