House File 514 - Introduced HOUSE FILE 514 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 97) A BILL FOR An Act establishing a motor vehicle insurance verification 1 program, establishing fees, and including penalty and 2 effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1042HV (2) 86 ns/nh
H.F. 514 Section 1. Section 321.11, subsection 3, Code 2015, is 1 amended to read as follows: 2 3. Notwithstanding other provisions of this section to the 3 contrary, the department shall not release personal information 4 to a person, other than to an officer or employee of a law 5 enforcement agency, an employee of a federal or state agency 6 or political subdivision in the performance of the employee’s 7 official duties, a contract employee of the department of 8 inspections and appeals in the conduct of an investigation, or 9 a licensed private investigation agency or a licensed security 10 service or a licensed employee of either, if the information is 11 requested by the presentation of a registration plate number. 12 However, the department may release personal information to the 13 department’s designated agent for the purposes of chapter 321B. 14 In addition, an officer or employee of a law enforcement agency 15 may release the name, address, and telephone number of a motor 16 vehicle registrant to a person requesting the information by 17 the presentation of a registration plate number if the officer 18 or employee of the law enforcement agency believes that the 19 release of the information is necessary in the performance of 20 the officer’s or employee’s duties. 21 Sec. 2. NEW SECTION . 321B.1 Short title. 22 This chapter shall be known and may be cited as the “Motor 23 Vehicle Insurance Verification Act” . 24 Sec. 3. NEW SECTION . 321B.2 Definitions. 25 As used in this chapter, unless the context otherwise 26 requires: 27 1. “Commercial motor vehicle insurance coverage” means an 28 insurance policy that is defined by the department by rule and 29 includes motor vehicle liability coverage, uninsured motorist 30 coverage, underinsured motorist coverage, or personal injury 31 coverage. 32 2. “Database” means the motor vehicle insurance verification 33 database created under this chapter. 34 3. “Department” means the department of transportation. 35 -1- LSB 1042HV (2) 86 ns/nh 1/ 11
H.F. 514 4. “Designated agent” means the third party with which the 1 department contracts under section 321B.3. 2 5. “Financial institution” means financial institution as 3 defined in 18 U.S.C. §20. 4 6. “Motor vehicle” means motor vehicle as defined in section 5 321.1. 6 7. “Program” means the motor vehicle insurance verification 7 program created under this chapter. 8 Sec. 4. NEW SECTION . 321B.3 Motor vehicle insurance 9 verification program. 10 1. A motor vehicle insurance verification program is 11 created within the department to be administered by the 12 department. The purposes of the program include all of the 13 following: 14 a. To establish a motor vehicle insurance verification 15 database to verify compliance with the requirements of section 16 321.20B. 17 b. To assist in reducing the number of uninsured motor 18 vehicles on the highways of the state. 19 c. To assist in increasing compliance with motor vehicle 20 registration requirements and for other law enforcement 21 purposes. 22 d. To assist in protecting the bona fide security interests 23 of financial institutions in motor vehicles. 24 2. The department shall contract with a third party to act 25 as the department’s designated agent for administration of this 26 chapter. The designated agent shall establish and maintain a 27 computer database containing the following information: 28 a. Information provided by insurers under section 321B.5. 29 b. Information provided by the department under subsection 30 5. 31 c. Any other information provided by the department pursuant 32 to this chapter. 33 3. The database shall be developed and maintained in 34 accordance with guidelines established by the department by 35 -2- LSB 1042HV (2) 86 ns/nh 2/ 11
H.F. 514 rule to allow authorized state and local law enforcement 1 agencies and financial institutions to efficiently access the 2 records of the database, including reports useful for the 3 implementation of this chapter. 4 a. Database reports shall be in a form and contain 5 information approved by the department. 6 b. Database reports may be made available through the 7 department’s internet site or through other electronic media 8 if the department determines that sufficient security is 9 provided to ensure compliance with the provisions of this 10 chapter regarding limitations on disclosure of information in 11 the database. 12 4. At least twice monthly, the designated agent shall do the 13 following, using information provided by the department: 14 a. Update the database with motor vehicle insurance 15 information provided by insurers in accordance with section 16 321B.5. 17 b. Compare all current motor vehicle registrations against 18 the database. 19 5. On or before the seventh day of each calendar month, the 20 department shall provide the designated agent with the make, 21 model, year, and vehicle identification number of each vehicle 22 in the department’s motor vehicle database, and the name and 23 address of each person listed on each vehicle’s registration. 24 6. The department shall adopt rules in accordance with 25 chapter 17A establishing procedures for using the department’s 26 motor vehicle database for the purposes of administering and 27 enforcing this chapter. 28 7. a. The designated agent shall archive database files at 29 least semiannually for auditing purposes. 30 b. The department shall audit the program at least annually. 31 The audit shall include verification of: 32 (1) Billings made by the designated agent. 33 (2) The accuracy of the designated agent’s matching of 34 vehicle registration records with insurance data. 35 -3- LSB 1042HV (2) 86 ns/nh 3/ 11
H.F. 514 Sec. 5. NEW SECTION . 321B.4 Enforcement of financial 1 responsibility requirements —— penalty. 2 1. If records in the database indicate that a registered 3 motor vehicle is not covered under an owner’s policy of 4 liability insurance for three consecutive months, at the 5 direction of the department, the designated agent shall provide 6 notice by first-class mail to the owner of the motor vehicle 7 that the owner has fifteen days from the date the notice was 8 mailed to provide one of the following: 9 a. Proof of financial liability coverage as defined in 10 section 321.1, subsection 24B. 11 b. Proof that the owner is exempt from the requirement to 12 maintain proof of financial liability coverage under section 13 321.20B. 14 2. If, after fifteen days, the owner of the motor vehicle 15 fails to provide satisfactory proof of financial liability 16 coverage, the designated agent shall provide a second notice 17 by first-class mail to the owner of the motor vehicle allowing 18 the owner an additional fifteen days from the date the second 19 notice was mailed to provide the information requested under 20 subsection 1. 21 3. a. The designated agent shall update the database 22 regarding each notice sent to a motor vehicle owner under 23 subsections 1 and 2, indicating the information provided by the 24 motor vehicle owner or the owner’s failure to provide proof of 25 financial liability coverage, as applicable. 26 b. If the owner of a motor vehicle provides proof to the 27 department or the designated agent that the owner’s motor 28 vehicle is covered by an acceptable form of financial liability 29 coverage described in section 321.1, subsection 24B, paragraph 30 “b” , “c” , or “d” , the information shall be recorded in the 31 database. 32 4. a. If the owner of a motor vehicle fails to provide 33 proof of financial liability coverage following receipt of the 34 second notice under subsection 2, the designated agent shall 35 -4- LSB 1042HV (2) 86 ns/nh 4/ 11
H.F. 514 notify the department, and the department shall revoke the 1 registration of the motor vehicle. 2 b. The department shall provide to the owner of the motor 3 vehicle appropriate notice of the revocation, order the owner 4 to surrender the registration plates and registration receipt 5 for the vehicle to the county treasurer, advise the owner of 6 the legal consequences of operating a vehicle with revoked 7 registration and without financial liability coverage, and 8 instruct the owner on how to reinstate the vehicle registration 9 once the owner has obtained financial liability coverage for 10 the vehicle. 11 5. a. A person shall not provide a false or fraudulent 12 statement to the department or the department’s designated 13 agent in regard to proceedings under this chapter. 14 b. In addition to any other penalties, a person who violates 15 paragraph “a” is guilty of a simple misdemeanor. 16 6. A revocation of registration under this chapter is in 17 addition to any other penalty imposed by law. This chapter 18 does not affect other actions or penalties that may be taken or 19 imposed for a violation of section 321.20B or other law. 20 7. a. A registration that has been revoked under this 21 section shall not be reinstated and a new registration shall 22 not be issued to the holder of the revoked registration until 23 the person does all of the following: 24 (1) Pays to the department an administrative reinstatement 25 fee of one hundred dollars, in addition to any other penalty 26 imposed by law. 27 (2) Complies with the requirements of section 321.20B and 28 this chapter. 29 b. Reinstatement fees collected under this subsection 30 shall be retained by the department as repayment receipts as 31 defined in section 8.2 and shall be used exclusively to offset 32 the costs of administering the program. Fees collected by 33 the department that are in excess of the amount necessary for 34 administration of the program shall be transferred to the road 35 -5- LSB 1042HV (2) 86 ns/nh 5/ 11
H.F. 514 use tax fund annually on June 30. 1 Sec. 6. NEW SECTION . 321B.5 Motor vehicle insurance 2 reporting —— penalty. 3 1. a. Except as provided in paragraph “b” , each insurer 4 that issues a policy to a motor vehicle owner in this state 5 that includes motor vehicle liability coverage, uninsured 6 motorist coverage, underinsured motorist coverage, or 7 personal injury coverage shall, on or before the seventh 8 and twenty-first days of each calendar month, submit to the 9 department’s designated agent a record of each motor vehicle 10 insurance policy that was issued by the insurer and in effect 11 for a vehicle registered or garaged in this state as of the 12 date of the previous submission. 13 b. An insurer is not required to provide a record of a motor 14 vehicle insurance policy under paragraph “a” if the policy 15 covers a vehicle that is registered under chapter 326. 16 c. This subsection does not preclude more frequent 17 reporting. 18 2. A record provided by an insurer under subsection 1, 19 paragraph “a” , shall include all of the following: 20 a. The name, date of birth, and driver’s license number, if 21 the insured provides a driver’s license number to the insurer, 22 of each insured owner or operator, and the address of the named 23 insured. 24 b. The make, year, and vehicle identification number of each 25 insured vehicle. 26 c. The policy number and effective date of each policy. 27 3. An insurer shall provide the information required under 28 this section via electronic means or via another means the 29 designated agent agrees to accept. 30 4. a. The department may assess a civil penalty of not more 31 than two hundred fifty dollars for each day an insurer fails to 32 comply with this section. 33 b. If an insurer shows that the failure to comply with this 34 section was inadvertent, accidental, or the result of excusable 35 -6- LSB 1042HV (2) 86 ns/nh 6/ 11
H.F. 514 neglect, the department may waive the civil penalty. 1 c. An insurer that discloses records to the department’s 2 designated agent in a reasonable, good-faith effort to comply 3 with the requirements of this section shall not be subject to a 4 civil penalty under paragraph “a” . 5 Sec. 7. NEW SECTION . 321B.6 Disclosure of database 6 information —— penalty. 7 1. Information provided to the designated agent and 8 information contained in the database under this chapter are 9 confidential. Such information may not be disclosed, except 10 as follows: 11 a. For the purpose of investigating, litigating, or 12 enforcing the financial liability coverage requirements 13 of section 321.20B, the designated agent shall provide an 14 electronic record to a state or local government agency or 15 court verifying motor vehicle financial liability coverage 16 information. 17 b. For the purpose of investigating, litigating, or 18 enforcing the financial liability coverage requirements of 19 section 321.20B, the designated agent shall, upon request, 20 issue to any state or local government agency or court a 21 certificate documenting motor vehicle financial liability 22 coverage, according to the database, of a specific individual 23 or motor vehicle for the time period designated by the 24 government agency or court. 25 c. Upon request, the department or its designated agent 26 shall disclose whether an individual is covered under a motor 27 vehicle insurance policy and the insurance company name to: 28 (1) The individual or, if the individual is deceased, 29 any person who is an interested party in the estate of the 30 individual as provided under chapter 633. 31 (2) The parent or legal guardian of the individual if the 32 individual is an unemancipated minor. 33 (3) The legal guardian of the individual if the individual 34 is legally incapacitated. 35 -7- LSB 1042HV (2) 86 ns/nh 7/ 11
H.F. 514 (4) A person who has power of attorney for the individual. 1 (5) A person who submits a notarized release from the 2 individual dated no more than ninety days before the date the 3 request is made. 4 (6) A person suffering loss or injury in a motor vehicle 5 accident in which the individual was involved, but only as part 6 of an accident report as authorized in section 321.271 relating 7 to access to accident reports. 8 d. For the purpose of investigating, enforcing, or 9 prosecuting laws or issuing citations, information related to a 10 motor vehicle owner or operator’s financial liability coverage 11 under section 321.20B may be provided to state or local law 12 enforcement agencies. 13 e. Upon request of a peace officer acting in an official 14 capacity under the provisions of paragraph “d” , the department 15 or the designated agent shall, upon request, disclose relevant 16 information contained in the database. 17 f. For the purpose of the state auditor conducting audits 18 of the program. 19 g. Upon request of a financial institution for the purpose 20 of protecting the financial institution’s bona fide security 21 interest in a motor vehicle. 22 2. a. The department may allow the designated agent to 23 prepare and deliver, upon request, a report on the insurance 24 information of a person or motor vehicle in accordance with 25 this section. The report may be in the form of: 26 (1) A certified copy that is considered admissible in any 27 court proceeding in the same manner as the original. 28 (2) Information accessible through the internet or through 29 another electronic medium if the department determines that 30 sufficient security is provided to ensure compliance with this 31 section. 32 b. The department may allow the designated agent to charge a 33 fee established by the department for each of the following: 34 (1) Authenticating a document, including preparation and 35 -8- LSB 1042HV (2) 86 ns/nh 8/ 11
H.F. 514 delivery of a certified copy. 1 (2) Accessing a record through the internet or through 2 another electronic medium. 3 (3) Providing a record to a financial institution under 4 subsection 1, paragraph “g” . 5 3. Any person who knowingly releases or discloses 6 information from the database for a purpose other than those 7 authorized in this section or to a person who is not entitled 8 to such information is guilty of a class “D” felony. 9 4. Neither the state nor the department’s designated agent 10 is liable to any person for gathering, managing, or using the 11 information in the database in compliance with this chapter. 12 Sec. 8. EFFECTIVE DATE. This Act takes effect July 1, 2016. 13 EXPLANATION 14 The inclusion of this explanation does not constitute agreement with 15 the explanation’s substance by the members of the general assembly. 16 This bill establishes a motor vehicle insurance verification 17 program within the department of transportation. The 18 department is required to contract with a third party to act 19 as the department’s designated agent for administration of the 20 program. 21 The designated agent is required to establish and maintain a 22 database containing information from insurers relating to motor 23 vehicle insurance coverage for registered motor vehicles, motor 24 vehicle identification information, personal identification 25 information for registered owners of motor vehicles, and any 26 other information provided to the designated agent by the 27 department. 28 At least twice a month, the designated agent shall update the 29 database and compare current motor vehicle registrations with 30 updated insurance information. The files in the database shall 31 be archived semiannually and audited by the department at least 32 annually. The bill requires the department to adopt rules for 33 administration of the database. 34 If database records show that a registered motor vehicle 35 -9- LSB 1042HV (2) 86 ns/nh 9/ 11
H.F. 514 is not covered under an owner’s policy of liability insurance 1 for three months, the designated agent shall send a notice to 2 the owner requiring the owner to respond within 15 days by 3 providing proof of financial liability coverage or proof that 4 the owner is exempt from the requirement to maintain financial 5 liability coverage. If the owner fails to respond, a second 6 notice will be sent. If the owner does not respond to the 7 second notice, the owner’s motor vehicle registration will be 8 revoked by the department and the owner will be required to 9 surrender the registration plates and registration receipt for 10 the vehicle to the county treasurer. In order to obtain a 11 new registration for the vehicle, the owner must comply with 12 financial responsibility requirements and pay an administrative 13 fee of $100. The fees are to be used by the department 14 exclusively to offset the costs of administering the program. 15 Any fees in excess of the amount needed for administration of 16 the program are to be transferred to the road use tax fund 17 annually on June 30. 18 The bill provides that if a motor vehicle is covered by a 19 form of financial liability coverage other than an insurance 20 policy, that fact shall be noted in the database. 21 The bill prohibits a person from providing false or 22 fraudulent information to the department or the department’s 23 designated agent in relation to the motor vehicle insurance 24 verification program. A violation is a simple misdemeanor. 25 The bill requires each insurer that issues a policy that 26 includes motor vehicle liability coverage, uninsured motorist 27 coverage, underinsured motorist coverage, or personal injury 28 coverage to the owner of a motor vehicle to provide, before the 29 7th and the 21st of each month, to the department’s designated 30 agent a record of each motor vehicle insurance policy issued by 31 the insurer and in effect for vehicles registered or garaged in 32 this state as of the date of the previous submission. Vehicles 33 subject to apportioned registration are not included in this 34 requirement. Insurers that fail to comply with the reporting 35 -10- LSB 1042HV (2) 86 ns/nh 10/ 11
H.F. 514 requirement may be assessed a civil penalty of $250 per day. 1 However, the department may waive the penalty upon a showing 2 that the failure was inadvertent, accidental, or the result 3 of excusable neglect. An insurer that discloses records to 4 the department’s designated agent in a reasonable, good-faith 5 effort to comply with the bill is not subject to the penalty. 6 Information contained in the database is confidential, 7 but the bill provides exceptions for disclosures to state or 8 local government agencies and courts for specified purposes; 9 to individuals and certain other authorized persons; for 10 purposes of an accident investigation; to law enforcement 11 agencies and peace officers for certain official purposes; 12 to the state auditor; and to financial institutions with a 13 security interest in a motor vehicle. The designated agent 14 may be authorized to provide certified copies or electronic 15 records, as appropriate, and to charge a fee for the provision 16 of records and authentication of documents. 17 A person who knowingly releases or discloses information 18 from the database for a purpose other than those authorized in 19 the bill or to a person who is not entitled to such information 20 is guilty of a class “D” felony. 21 The bill provides that the state and the department’s 22 designated agent are not liable to any person for gathering, 23 managing, or using the information in the database in 24 compliance with the bill. 25 The bill provides for an effective date of July 1, 2016. 26 -11- LSB 1042HV (2) 86 ns/nh 11/ 11