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Senate File 186

Partial Bill History

Bill Introduced: S.J. 425
Complete Bill History

Bill Text

PAG LIN
  1  1    Section 1.  Section 321.1, Code 1995, is amended by adding
  1  2 the following new subsections:
  1  3    NEW SUBSECTION.  34A.  "Liability insurance coverage" means
  1  4 any of the following:
  1  5    a.  An owner's policy of liability insurance which is
  1  6 issued by an insurance company authorized to do business in
  1  7 Iowa to or for the benefit of the person named in the policy
  1  8 as insured, and insuring the person named as insured and any
  1  9 person using an insured motor vehicle with the express or
  1 10 implied permission of the named insured against loss from
  1 11 liability imposed by law for damages arising out of the
  1 12 ownership, maintenance, or use of an insured motor vehicle
  1 13 within the United States of America or the Dominion of Canada,
  1 14 but subject to minimum limits, exclusive of interest and
  1 15 costs, in the amounts specified in section 321A.21 or
  1 16 specified in another provision of the Code, whichever is
  1 17 greater.
  1 18    b.  A bond filed with the director pursuant to section
  1 19 321A.24.
  1 20    c.  A valid certificate of deposit of money or security
  1 21 issued by the treasurer of state pursuant to section 321A.25.
  1 22    d.  A valid certificate of self-insurance issued by the
  1 23 director pursuant to section 321A.34.
  1 24    NEW SUBSECTION.  54A.  "Proof of insurance card" means
  1 25 either a liability insurance card issued under section
  1 26 321.20A, bond insurance card issued under section 321A.24,
  1 27 security insurance card issued under section 321A.25, or self-
  1 28 insurance card issued under section 321A.34.
  1 29    Sec. 2.  Section 321.20, Code 1995, is amended by adding
  1 30 the following new subsection:
  1 31    NEW SUBSECTION.  6.  Proof of liability insurance coverage
  1 32 if the registration is for a motor vehicle.
  1 33    Sec. 3.  NEW SECTION.  321.20A  PROOF OF LIABILITY
  1 34 INSURANCE COVERAGE.
  1 35    1.  Notwithstanding chapter 321A, which requires certain
  2  1 persons to maintain proof of financial responsibility, a
  2  2 person shall not allow the person's motor vehicle to be driven
  2  3 on the highways of this state unless liability insurance
  2  4 coverage as defined in section 321.1, subsection 34A, is in
  2  5 effect for the motor vehicle and unless the driver has in the
  2  6 motor vehicle the proof of insurance card issued for the motor
  2  7 vehicle.
  2  8    2.  An insurance company transacting business in this state
  2  9 shall issue to its insured owners of motor vehicles registered
  2 10 in this state a liability insurance card for each insured
  2 11 issued a motor vehicle license.  The liability insurance card
  2 12 shall be in accordance with rules adopted by the commissioner
  2 13 of insurance pursuant to chapter 17A after consultation with
  2 14 the state department of transportation.  Each liability
  2 15 insurance card shall identify the motor vehicle license number
  2 16 of the insured and shall indicate the expiration date of the
  2 17 applicable liability insurance coverage.  The liability
  2 18 insurance card shall also contain the name and address of the
  2 19 insured and insurer.
  2 20    3.  If the liability insurance coverage for a person issued
  2 21 a motor vehicle license in this state is canceled or
  2 22 terminated effective prior to the expiration date indicated on
  2 23 the liability insurance card issued for the person, the person
  2 24 shall return the liability insurance card to the insurer which
  2 25 issued the card.
  2 26    4.  An owner of a motor vehicle who is charged with
  2 27 violating subsection 1 shall not be convicted if the person
  2 28 produces in court, within a reasonable time, proof that
  2 29 liability insurance coverage was in effect for the person at
  2 30 the time of the person's arrest.
  2 31    5.  A person who violates this section commits the
  2 32 following:
  2 33    a.  A simple misdemeanor if the person has had no previous
  2 34 conviction under this section within the previous six years.
  2 35 The person shall be assessed a fine of twenty-five dollars.
  3  1    b.  A simple misdemeanor if the person has had one previous
  3  2 conviction under this section within the previous six years.
  3  3 The person shall be assessed a fine of one hundred dollars.
  3  4    c.  A serious misdemeanor if the person has had two or more
  3  5 previous convictions under this section within the previous
  3  6 six years.  The person shall be assessed a fine of five
  3  7 hundred dollars.
  3  8    6.  a.  Upon the conviction of a person who commits a
  3  9 serious misdemeanor under subsection 5, the court shall order
  3 10 that any motor vehicles owned or operated by the person be
  3 11 impounded.  The order shall specify all of the following:
  3 12    (1)  The motor vehicles subject to the order.
  3 13    (2)  The period of impoundment.
  3 14    (3)  The place at which the motor vehicles are to be
  3 15 impounded.
  3 16    (4)  The person or agency which is to be responsible for
  3 17 carrying out the order of impoundment.  If the vehicle which
  3 18 is subject to impoundment is in the custody of a law
  3 19 enforcement agency, the court shall designate that agency as
  3 20 the responsible agency.
  3 21    b.  The period of impoundment shall be for no more than six
  3 22 months.  A person may claim the motor vehicle if the owner
  3 23 provides proof of liability insurance coverage and pays a fee
  3 24 of one hundred dollars plus the costs of any expense for
  3 25 storage of the motor vehicle.  The amounts payable shall be
  3 26 paid to the clerk of the district court who shall forward a
  3 27 copy of the receipt to the department.
  3 28    c.  If a motor vehicle owner fails to claim the motor
  3 29 vehicle as provided in paragraph "b" within six months, the
  3 30 motor vehicle shall be forfeited to the state under chapter
  3 31 809.
  3 32    7.  For purposes of this section, a violation of subsection
  3 33 1 shall be attributed to the owner of the motor vehicle,
  3 34 whether or not the owner is the person operating the vehicle
  3 35 at the time of the violation, unless such owner establishes
  4  1 that the vehicle was operated without the owner's consent.
  4  2 Operation of a motor vehicle in this state in violation of
  4  3 subsection 1 establishes a rebuttable presumption that such
  4  4 operation was with the consent of the owner.
  4  5    8.  The director of transportation and the commissioner of
  4  6 insurance shall adopt rules pursuant to chapter 17A to
  4  7 implement this section.
  4  8    Sec. 4.  Section 321.177, Code 1995, is amended by adding
  4  9 the following new subsection:
  4 10    NEW SUBSECTION.  10.  To any person who does not at the
  4 11 time of application provide proof of liability insurance
  4 12 coverage as required in section 321.20A.
  4 13    Sec. 5.  Section 321.492, unnumbered paragraph 1, Code
  4 14 1995, is amended to read as follows:
  4 15    Any A peace officer is authorized to stop any a vehicle to
  4 16 require exhibition of the driver's motor vehicle license, to
  4 17 require exhibition of the proof of insurance card issued for
  4 18 the driver, to serve a summons or memorandum of traffic
  4 19 violation, to inspect the condition of the vehicle, to inspect
  4 20 the vehicle with reference to size, weight, cargo, log book,
  4 21 bills of lading or other manifest of employment, tires, and
  4 22 safety equipment, or to inspect the registration certificate,
  4 23 the compensation certificate, travel order, or permit of the
  4 24 vehicle.
  4 25    Sec. 6.  Section 321A.17, subsections 1 through 3, Code
  4 26 1995, are amended to read as follows:
  4 27    1.  Whenever When the department, under any a law of this
  4 28 state, suspends or revokes the license of any a person upon
  4 29 receiving record of a conviction or a forfeiture of bail or
  4 30 revokes the license of any a person pursuant to chapter 321J,
  4 31 the department shall also suspend the registration for all
  4 32 motor vehicles registered in the name of the person, except
  4 33 that the department shall not suspend the registration, unless
  4 34 otherwise required by law, if the person has previously given
  4 35 or immediately gives and thereafter maintains proof of
  5  1 financial responsibility liability insurance coverage, as
  5  2 defined in section 321.1, subsection 34A, with respect to all
  5  3 motor vehicles registered by the person.
  5  4    2.  Such The license and registration shall remain
  5  5 suspended or revoked and shall not at any time thereafter be
  5  6 renewed nor shall any a license be thereafter issued to such
  5  7 the person, nor shall any motor vehicle be thereafter
  5  8 registered in the name of such person until permitted under
  5  9 the motor vehicle laws of this state and not then unless and
  5 10 until the person shall give gives and thereafter maintain
  5 11 maintains proof of financial responsibility liability
  5 12 insurance coverage, as defined in section 321.1, subsection
  5 13 34A.
  5 14    3.  If a person is not licensed, but by final order or
  5 15 judgment is convicted of or forfeits any bail or collateral
  5 16 deposited to secure an appearance for trial for any offense
  5 17 requiring the suspension or revocation of license, or for
  5 18 operating an unregistered motor vehicle upon the highways, no
  5 19 a license shall not be thereafter issued to such that person
  5 20 and no motor vehicle shall continue to be registered or
  5 21 thereafter be registered in the name of such person until the
  5 22 person shall give gives and thereafter maintain maintains
  5 23 proof of financial responsibility liability insurance
  5 24 coverage, as defined in section 321.1, subsection 34A.
  5 25    Sec. 7.  Section 321A.24, subsection 1, Code 1995, is
  5 26 amended to read as follows:
  5 27    1.  Proof of financial responsibility liability insurance
  5 28 coverage, as defined in section 321.1, subsection 34A, may be
  5 29 evidenced by the bond of a surety company duly authorized to
  5 30 transact business within this state, or a bond with at least
  5 31 two individual sureties each owning real estate within this
  5 32 state, and together having equities equal in value to at least
  5 33 twice the amount of the bond, which real estate shall be
  5 34 scheduled in the bond approved by a judge or clerk of a the
  5 35 district court of record, and which said bond shall be
  6  1 conditioned for payment of the amounts specified in section
  6  2 321A.1, subsection 10.  Such The bond shall be filed with the
  6  3 department and shall is not be cancelable except after ten
  6  4 days' written notice to the department.  Such The department
  6  5 shall issue to the person filing the bond a bond insurance
  6  6 card.  The bond insurance card shall state the name and
  6  7 address of the person to whom the card is issued.  The bond
  6  8 shall constitute constitutes a lien in favor of the state upon
  6  9 the real estate so scheduled of any surety, which lien shall
  6 10 exist exists in favor of any holder of a final judgment
  6 11 against the person who has filed such the bond, for damages,
  6 12 including damages for care and loss of services, because of
  6 13 bodily injury to or death of any a person, or for damage
  6 14 because of injury to or destruction of property, including the
  6 15 loss of use thereof of the property, resulting from the
  6 16 ownership, maintenance, use, or operation of a motor vehicle
  6 17 after such the bond was filed, upon the filing of notice to
  6 18 that effect by the department in the office of the proper
  6 19 clerk of the district court of the county where such the real
  6 20 estate shall be is located.  Any An individual surety so
  6 21 scheduling real estate security shall furnish satisfactory
  6 22 evidence of title thereto to the property and the nature and
  6 23 extent of all encumbrances thereon on the property and the
  6 24 value of the surety's interest therein in the property, in
  6 25 such the manner as the judge or clerk of the district court of
  6 26 record approving the bond may require requires.  The notice
  6 27 filed by the department shall contain, in addition to any
  6 28 other matters deemed by the department to be pertinent,
  6 29 contain a legal description of the real estate so scheduled,
  6 30 the name of the holder of the record title, the amount for
  6 31 which it stands as security, and the name of the person in
  6 32 whose behalf proof is so being made.  Upon the filing of such
  6 33 the notice the clerk of the district court of such county
  6 34 shall retain the same notice as part of the records of such
  6 35 the court and enter upon the encumbrance book the date and
  7  1 hour of filing, the name of the surety, the name of the record
  7  2 titleholder, the description of the real estate, and the
  7  3 further notation that a lien is charged on such the real
  7  4 estate pursuant to the filed notice filed hereunder.  From and
  7  5 after the entry of the foregoing notice upon the encumbrance
  7  6 book all persons whomsoever shall be are charged with notice
  7  7 thereof of it.
  7  8    If the bond is cancelled, the person who filed the bond
  7  9 shall surrender to the department all bond insurance cards
  7 10 issued to the person.
  7 11    Sec. 8.  Section 321A.25, subsection 1, Code 1995, is
  7 12 amended to read as follows:
  7 13    1.  With respect to accidents occurring on or after January
  7 14 1, 1981, and before January 1, 1983, proof of financial
  7 15 responsibility may be evidenced by the certificate of the
  7 16 state treasurer that the person named in the certificate has
  7 17 deposited with the treasurer forty thousand dollars in cash,
  7 18 or securities such as may legally be purchased by a state bank
  7 19 or for trust funds of a market value of forty thousand
  7 20 dollars; and with respect to accidents occurring on or after
  7 21 January 1, 1983, proof Proof of financial responsibility
  7 22 liability insurance coverage, as defined in section 321.1,
  7 23 subsection 34A, may be evidenced by the certificate of the
  7 24 state treasurer of state that the person named in the
  7 25 certificate has deposited with the treasurer of state fifty-
  7 26 five thousand dollars in cash, or securities such as which may
  7 27 legally be purchased by a state bank or for trust funds of a
  7 28 market value of fifty-five thousand dollars.  The treasurer of
  7 29 state shall promptly notify the state department of
  7 30 transportation of the name and address of the person to whom
  7 31 the certificate has been issued.  Upon receipt of the
  7 32 notification, the department shall issue to the person a
  7 33 security insurance card.  The security insurance card shall
  7 34 state the name and address of the person and the motor vehicle
  7 35 license number of the person.  The state treasurer of state
  8  1 shall not accept a deposit and issue a certificate for it and
  8  2 the department shall not accept the certificate unless
  8  3 accompanied by evidence that there are no unsatisfied
  8  4 judgments of any character against the depositor in the county
  8  5 where the depositor resides.
  8  6    Sec. 9.  Section 321A.32, subsection 3, Code 1995, is
  8  7 amended to read as follows:  
  8  8    3.  Any A person who shall forge forges or, without
  8  9 authority, sign any signs a notice provided for under section
  8 10 321A.5 that a policy or bond is in effect, or any evidence of
  8 11 proof of financial responsibility, or any evidence of
  8 12 liability insurance coverage as defined in section 321.1,
  8 13 subsection 34A, or who files or offers for filing any such
  8 14 notice or evidence of proof knowing or having reason to
  8 15 believe that it is forged or signed without authority, shall
  8 16 be is guilty of a serious misdemeanor.
  8 17    Sec. 10.  Section 321A.34, subsections 2 and 3, Code 1995,
  8 18 are amended to read as follows:
  8 19    2.  The department may, in the department's discretion,
  8 20 upon the application of such a person, issue a certificate of
  8 21 self-insurance when if the department is satisfied that such
  8 22 the person is possessed has and will continue to be possessed
  8 23 of have the ability to pay judgments obtained against such the
  8 24 person for damages arising out of the ownership, maintenance,
  8 25 or use of any vehicle owned by such the person.  The director
  8 26 shall issue to each person who has in effect a valid
  8 27 certificate of self-insurance, a self-insurance card.  The
  8 28 card shall state the name and address of the person and shall
  8 29 state the motor vehicle license number of the person to whom
  8 30 the card is issued.
  8 31    3.  Upon not less than five days' notice and a hearing
  8 32 pursuant to such the notice, the department may upon
  8 33 reasonable grounds cancel a certificate of self-insurance.
  8 34 Failure to pay any a judgment for damages arising out of the
  8 35 ownership, maintenance, or use of any a vehicle owned by such
  9  1 the self-insurer within thirty days after such the judgment
  9  2 shall have become becomes final shall constitute constitutes a
  9  3 reasonable ground for the cancellation of a certificate of
  9  4 self-insurance.  Upon the cancellation of a certificate of
  9  5 self-insurance, the person who was issued the certificate
  9  6 shall surrender to the director all self-insurance cards
  9  7 issued to the person.
  9  8    Sec. 11.  Section 516A.1, Code 1995, is amended to read as
  9  9 follows:
  9 10    516A.1  COVERAGE INCLUDED IN EVERY LIABILITY POLICY &endash;
  9 11 REJECTION BY INSURED.
  9 12    No automobile liability or motor vehicle liability
  9 13 insurance policy insuring against liability for bodily injury
  9 14 or death arising out of the ownership, maintenance, or use of
  9 15 a motor vehicle shall be delivered or issued for delivery in
  9 16 this state with respect to any motor vehicle registered or
  9 17 principally garaged in this state, unless coverage is provided
  9 18 in such policy or supplemental thereto, for the protection of
  9 19 persons insured under such policy who are legally entitled to
  9 20 recover damages from the owner or operator of an uninsured
  9 21 motor vehicle or a hit-and-run motor vehicle or an
  9 22 underinsured motor vehicle because of bodily injury, sickness,
  9 23 or disease, including death resulting therefrom, caused by
  9 24 accident and arising out of the ownership, maintenance, or use
  9 25 of such uninsured or underinsured motor vehicle, or arising
  9 26 out of physical contact of such hit-and-run motor vehicle with
  9 27 the person insured or with a motor vehicle which the person
  9 28 insured is occupying at the time of the accident.  Both the
  9 29 uninsured motor vehicle or hit-and-run motor vehicle coverage,
  9 30 and the underinsured motor vehicle coverage shall include
  9 31 limits for bodily injury or death at least equal to those
  9 32 stated in section 321A.1, subsection 10.  Both the uninsured
  9 33 motor vehicle or hit-and-run motor vehicle coverage, and the
  9 34 underinsured motor vehicle coverage shall only be offered with
  9 35 no deductible amount applicable.  The form and provisions of
 10  1 such coverage shall be examined and approved by the
 10  2 commissioner of insurance.
 10  3    However, the named insured may reject all of such coverage,
 10  4 or reject the uninsured motor vehicle (hit-and-run motor
 10  5 vehicle) coverage, or reject the underinsured motor vehicle
 10  6 coverage, by written rejections signed by the named insured.
 10  7 If rejection is made on a form or document furnished by an
 10  8 insurance company or insurance agent, it shall be on a
 10  9 separate sheet of paper which contains only the rejection and
 10 10 information directly related to it.  Such coverage need not be
 10 11 provided in or supplemental to a renewal policy if the named
 10 12 insured has rejected the coverage in connection with a policy
 10 13 previously issued to the named insured by the same insurer.
 10 14    Sec. 12.  EFFECTIVE DATE AND IMPLEMENTATION.  Sections 1
 10 15 through 11 of this Act take effect January 1, 1996.  However,
 10 16 in order to implement this Act, the insurance division of the
 10 17 department of commerce and the director of transportation
 10 18 shall each adopt rules as required under this Act by October
 10 19 1, 1995, to be effective by January 1, 1996.  The treasurer of
 10 20 state shall notify the director of transportation of the names
 10 21 and addresses of persons who are issued valid certificates
 10 22 under section 321A.25, subsection 1, Code 1995, by November 1,
 10 23 1995, and after that date the treasurer of state shall notify
 10 24 the director of transportation as required under section 8 of
 10 25 this Act.  Insurance carriers authorized to do business in
 10 26 this state and the director of transportation shall distribute
 10 27 proof of insurance cards as required under this Act by
 10 28 December 1, 1995.  
 10 29                           EXPLANATION
 10 30    This bill prohibits a person from allowing the person's
 10 31 motor vehicle to be driven in this state unless liability
 10 32 insurance coverage is in effect for the person's motor vehicle
 10 33 registered in this state.  An owner of a motor vehicle who
 10 34 violates this prohibition commits the following:  a simple
 10 35 misdemeanor if the person has had no previous conviction for
 11  1 the same violation within the previous six years, and shall be
 11  2 assessed a fine of $25; a simple misdemeanor if the person has
 11  3 had one previous conviction within the previous six years, and
 11  4 shall be assessed a fine of $100; and a serious misdemeanor if
 11  5 the person has had two or more previous convictions within the
 11  6 previous six years and shall be assessed a fine of $500.  The
 11  7 bill also provides for the impoundment of the vehicle of a
 11  8 person convicted of a third or subsequent offense and requires
 11  9 payment of a fee.
 11 10    The driver of the motor vehicle is also subject to a
 11 11 conviction for a violation if the driver does not have in the
 11 12 motor vehicle a proof of insurance card issued for the motor
 11 13 vehicle.  However, a person charged with not having in the
 11 14 motor vehicle a proof of insurance card will not be convicted
 11 15 if the person produces in court, within a reasonable time,
 11 16 proof that the person had liability insurance coverage at the
 11 17 time of the driver's arrest.  Under the bill, liability
 11 18 insurance coverage includes either liability insurance, the
 11 19 filing of a bond, the deposit of money or securities, or a
 11 20 certification of self-insurance.
 11 21    The bill creates and internally cites new section 321.20A
 11 22 and new subsection 34A of section 321.1.
 11 23    The bill provides that uninsured and underinsured coverage
 11 24 shall only be offered with no deductible amount applicable.
 11 25    The bill generally takes effect January 1, 1996, but
 11 26 certain administrative actions are required prior to that date
 11 27 to allow for the bill's implementation.
 11 28    This bill may create a state mandate as defined in chapter
 11 29 25B.  
 11 30 LSB 1828XS 76
 11 31 mj/sc/14.1

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