SF 2060 (LSB 5566XS (3) 83)

SENATE FILE 2060

BY  SODDERS

A BILL FOR

An Act requiring financial liability coverage as a condition for registration of a motor vehicle, requiring insurance carriers to certify automobile liability coverage to the department of transportation, and providing civil and criminal penalties. 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 321.20, subsection 1, Code 2009, is amended by adding the following new paragraph:
   NEW PARAGRAPH.  g.  If the vehicle is a motor vehicle, the owner shall certify on the application that financial liability coverage is in effect for the motor vehicle as required by section 321.21. The application provided by the department shall include a statement for the applicant to sign that acknowledges the applicant’s knowledge of the requirement to notify the county treasurer of a financial liability coverage change. 
    Sec. 2.  NEW SECTION.  321.21  Proof of financial liability coverage required for motor vehicle registration —— penalties. 
   1.  A motor vehicle shall not be registered unless financial liability coverage, as defined in section 321.1, subsection 24B, is in effect for the motor vehicle at the time of registration. If the form of financial liability coverage is an owner’s policy of liability insurance, the owner shall provide a description of the financial liability coverage as noted on the proof of financial liability coverage card issued for the motor vehicle. The department may require that the owner’s insurance company verify that the financial liability coverage is in effect for the motor vehicle at the time of application for registration. 
   2.  When the insurance carrier or other source of financial liability coverage for a vehicle changes, the owner shall notify the county treasurer within five days of obtaining the new coverage. If liability insurance for the motor vehicle is canceled or terminated at any time during the period of registration for a reason other than transfer of ownership of the motor vehicle, and new coverage is not obtained, the owner shall immediately surrender the registration certificate and registration plates for the motor vehicle to the county treasurer. 
   3.  An insurance company shall notify the department within twenty business days of the cancellation or termination of an owner’s policy of liability insurance. However, notice of cancellation is not required if the insurer cancels or terminates the old policy, no lapse in coverage results, and the insurer sends the certificate of insurance form for the new policy to the department. 
   4.  a.  Upon receiving notice of a lapse in insurance coverage for a motor vehicle, the department shall notify the owner of the lapse in coverage and require the owner to do one of the following within five days of the notification:
   (1)  Certify to the department that other financial liability coverage was in effect prior to the date of termination of the insurance coverage. 
   (2)  If a lapse in coverage occurred, certify that new financial liability coverage is in effect and, if the lapse was for more than five business days, pay a civil penalty of fifty dollars to the department. 
   (3)  Surrender the registration receipt and registration plates for the motor vehicle to the county treasurer. 
   b.  Failure of the owner to certify that financial liability coverage is in effect is prima facie evidence that such coverage does not exist, and unless the owner has surrendered the registration receipt and plates, the department shall revoke the registration for the vehicle. A revoked registration may be renewed after thirty days upon payment of a $50 civil penalty to the department and certification that financial liability coverage is in effect for the vehicle. 
   c.  The department shall provide notice of a revoked registration under this section to a peace officer verifying the registration of a motor vehicle.
   5.  The department shall waive the civil penalties imposed by this section for an owner who, at the time of notification of a lapse in financial liability coverage, is in the military service of the United States and has been deployed outside the continental United States for a period of forty-five days or more. Upon receiving notice of revocation of registration due to a lapse in coverage, the owner shall be allowed to transfer the vehicle’s ownership and registration to the owner’s spouse or child without penalty. 
   6.  a.  A person who falsely certifies as to financial liability coverage required under this section commits a simple misdemeanor. 
   b.  The owner of a motor vehicle subject to registration who permits the vehicle to be operated by another person without having financial liability coverage in effect as required under this section commits a simple misdemeanor. 
    Sec. 3.  Section 321.30, Code 2009, is amended by adding the following new subsection:
   NEW SUBSECTION.  4.  The department or the county treasurer shall refuse registration of a motor vehicle if the owner does not provide satisfactory certification that financial liability coverage is in effect for the motor vehicle as required by section 321.21. 
    Sec. 4.  Section 321.40, Code Supplement 2009, is amended by adding the following new subsection:
   NEW SUBSECTION.  7A.  A form for certification of financial liability coverage shall accompany each renewal statement sent to the owner of a motor vehicle under this section. The county treasurer shall refuse to renew the registration of a motor vehicle if the applicant does not submit certification of financial liability coverage in effect for the motor vehicle as required by section 321.21. 
    Sec. 5.  NEW SECTION.  516B.4  Reports to state department of transportation. 

    An insurance company transacting business in this state shall provide certification of automobile liability policies as required pursuant to section 321.21 within seven business days of receiving a request from the state department of transportation. An insurance company shall notify the department of transportation within twenty business days of the cancellation or termination of an automobile liability policy. 
EXPLANATION
   This bill requires the owner of a motor vehicle to certify that financial liability coverage is in effect for the vehicle as a condition for registration of the vehicle. Certification is required at the time of application for registration and for registration renewal. The owner is required to notify the county treasurer of any change in coverage within five days of obtaining the new coverage. If coverage is canceled or terminated and new coverage is not obtained, the owner is required to surrender the vehicle’s registration certificate and registration plates to the county treasurer. 
   The bill authorizes the department of transportation to require an insurance carrier to verify financial liability coverage certified by an owner, and requires an insurance carrier to notify the department within 20 business days of the cancellation or termination of an owner’s liability insurance policy. The notification is not required if the insurance carrier sends a new certificate of insurance form for a new policy covering the vehicle to the department. 
   When the department is notified by an insurance carrier of a lapse in coverage, the department shall provide notice to the motor vehicle owner of the need to either certify that other coverage was in effect prior to the termination of the insurance policy; certify that new coverage is in effect following the lapse, and if the lapse was for more than five business days, pay a civil penalty of $50; or surrender the registration receipt and plates for the motor vehicle to the county treasurer. If the owner fails to certify financial liability coverage or to surrender the registration receipt and plates within five days of receipt of the notice, the department shall revoke the motor vehicle registration. Registration may be renewed after 30 days, upon certification that financial liability coverage has been obtained and payment of a $50 civil penalty to the department. 
   The bill requires the department to flag the registration information available to peace officers when a registration is revoked due to a lapse in financial liability coverage.
   The bill requires the department to waive any civil penalties relating to a lapse in financial liability coverage for a member of the military service of the United States who has been deployed outside the continental United States for 45 days or more. Such an owner whose registration has been revoked because of a lapse in insurance coverage shall be allowed to transfer ownership and registration of the motor vehicle to the owner’s spouse or child without penalty.
   The bill provides that the owner of a motor vehicle commits a simple misdemeanor if the owner permits the vehicle to be operated by another person without having financial liability coverage in effect for the vehicle. In addition, a person who falsely certifies as to financial liability coverage required for registration or renewal commits a simple misdemeanor. A simple misdemeanor is punishable by confinement for no more than 30 days or a fine of at least $65 but not more than $625, or by both.