H.F. 551 Section 1. Section 321.11, subsection 3, Code 2017, 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. Section 321.20B, subsection 4, Code 2017, is amended 22 by adding the following new paragraph: 23 NEW PARAGRAPH . d. Notwithstanding any other provision 24 of law to the contrary, a peace officer shall not stop or 25 detain a person solely for a suspected violation of subsection 26 1. Subsection 1 is enforceable by a peace officer only as 27 a secondary action when the driver of a motor vehicle has 28 been stopped or detained for a suspected violation of another 29 provision of this chapter, a local ordinance equivalent to a 30 provision of this chapter, or other law. 31 Sec. 3. NEW SECTION . 321.492C Use of camera or optical 32 device for insurance enforcement prohibited. 33 The state or a political subdivision of the state shall not 34 use any automated or remote system equipped with a camera or 35 -1- LSB 1761HV (2) 87 ns/nh 1/ 15

H.F. 551 other optical device to identify persons operating a motor 1 vehicle in violation of section 321.20B or chapter 321A. 2 Sec. 4. NEW SECTION . 321B.1 Short title. 3 This chapter shall be known and may be cited as the “Motor 4 Vehicle Insurance Verification Act” . 5 Sec. 5. NEW SECTION . 321B.2 Definitions. 6 As used in this chapter, unless the context otherwise 7 requires: 8 1. “Advisory council” means the group established pursuant 9 to section 321B.3, subsection 2. 10 2. “Database” means the motor vehicle insurance verification 11 database created under this chapter. 12 3. “Department” means the department of transportation. 13 4. “Designated agent” means the third party with which the 14 department contracts under section 321B.3. 15 5. “Financial institution” means financial institution as 16 defined in 18 U.S.C. §20. 17 6. “Motor vehicle” means motor vehicle as defined in section 18 321.1. 19 7. “Program” means the motor vehicle insurance verification 20 program created under this chapter. 21 8. “Real-time internet services model” means an electronic 22 service established by insurers through the internet, the 23 world wide web, or a similar proprietary or common carrier 24 electronic system that complies with the specifications and 25 standards of the insurance industry committee on motor vehicle 26 administration and that is available twenty-four hours per 27 day, seven days per week, subject to reasonable allowances for 28 scheduled maintenance or temporary system failures. 29 Sec. 6. NEW SECTION . 321B.3 Motor vehicle insurance 30 verification program —— advisory council. 31 1. A motor vehicle insurance verification program is 32 created within the department to be administered by the 33 department. The purposes of the program include all of the 34 following: 35 -2- LSB 1761HV (2) 87 ns/nh 2/ 15

H.F. 551 a. To establish a motor vehicle insurance verification 1 database to verify compliance with the requirements of section 2 321.20B. 3 b. To assist in reducing the number of uninsured motor 4 vehicles on the highways of the state. 5 c. To assist in increasing compliance with motor vehicle 6 registration requirements and for other law enforcement 7 purposes. 8 d. To assist in protecting the bona fide security interests 9 of financial institutions in motor vehicles. 10 2. a. The department shall establish an advisory council, 11 chaired by the director of the department or a representative 12 of the department appointed by the director, consisting of 13 six members including the director of the department or the 14 representative of the department appointed by the director, 15 a representative of the department of public safety, an 16 insurance company representative appointed by the commissioner 17 of insurance, an insurance agent appointed by the commissioner 18 of insurance, a representative of a trade association of 19 property and casualty insurers appointed by the commissioner 20 of insurance, and a representative of a vendor with experience 21 implementing real-time internet services models and databases 22 similar to the database created under this chapter appointed by 23 the director of the department. 24 b. The advisory council shall do all of the following: 25 (1) Make recommendations to the department on the best 26 methods and practices for implementing a real-time internet 27 services model for insurance verification. 28 (2) Assist in the development of a guide for insurers 29 detailing the data fields and other information necessary for 30 compliance with this chapter. 31 (3) Provide an annual report to the department detailing the 32 improvements and implementation efforts relating to insurance 33 verification in other states for consideration in improving 34 compliance and operations in this state. 35 -3- LSB 1761HV (2) 87 ns/nh 3/ 15

H.F. 551 3. Following the competitive bidding procedures as provided 1 in chapter 8A, subchapter III, the department shall contract 2 with a third party to act as the department’s designated agent 3 for administration of this chapter for a period of four years. 4 For the period of the contract, the designated agent shall 5 establish and maintain a computer database containing the 6 following information: 7 a. Information provided by insurers under section 321B.5. 8 b. Information provided by the department under subsection 9 6. 10 c. Information obtained using a real-time internet services 11 model. 12 d. Any other information provided by the department pursuant 13 to this chapter. 14 4. The database shall be developed and maintained, and 15 access to a real-time internet services model shall be 16 provided, in accordance with guidelines established by the 17 department by rule to allow authorized state and local law 18 enforcement agencies and financial institutions to efficiently 19 access the records of the database and real-time internet 20 services model, including reports useful for the implementation 21 of this chapter, twenty-four hours per day, seven days 22 per week, subject to reasonable allowances for scheduled 23 maintenance or temporary system failures. 24 a. Database reports shall be in a form and contain 25 information approved by the department. 26 b. Database reports may be made available through the 27 department’s internet site or through other electronic media 28 if the department determines that sufficient security is 29 provided to ensure compliance with the provisions of this 30 chapter regarding limitations on disclosure of information in 31 the database. 32 c. The department shall consult with the chief information 33 officer appointed under section 8B.2 for the purpose of 34 developing network security requirements for the database. 35 -4- LSB 1761HV (2) 87 ns/nh 4/ 15

H.F. 551 5. At least twice monthly, the designated agent shall do the 1 following, using information provided by the department: 2 a. Update the database with motor vehicle insurance 3 information provided by insurers in accordance with section 4 321B.5. 5 b. Compare all current motor vehicle registrations against 6 the database. If records in the database indicate that a 7 registered motor vehicle is not covered under an owner’s 8 policy of liability insurance, the designated agent shall 9 use a real-time internet services model to determine if the 10 registered motor vehicle is covered under an owner’s policy of 11 liability insurance. 12 6. On or before the seventh day of each calendar month, the 13 department shall provide the designated agent with the make, 14 model, year, and vehicle identification number of each vehicle 15 in the department’s motor vehicle database, and the name and 16 address of each person listed on each vehicle’s registration. 17 7. The department shall adopt rules in accordance with 18 chapter 17A establishing procedures for the use of the 19 department’s motor vehicle database for the purposes of 20 administering and enforcing this chapter. 21 8. a. The designated agent shall archive database files at 22 least semiannually for auditing purposes. 23 b. The department shall audit the program at least annually. 24 The audit shall include verification of: 25 (1) Billings made by the designated agent. 26 (2) The accuracy of the designated agent’s matching of 27 vehicle registration records with insurance data. 28 Sec. 7. NEW SECTION . 321B.4 Enforcement of financial 29 responsibility requirements —— penalty. 30 1. If records in the database and the real-time internet 31 services model used by the designated agent indicate that a 32 registered motor vehicle is not covered under an owner’s policy 33 of liability insurance for three consecutive months, at the 34 direction of the department the designated agent shall provide 35 -5- LSB 1761HV (2) 87 ns/nh 5/ 15

H.F. 551 notice by first-class mail to the owner of the motor vehicle 1 that the owner has fifteen days from the date the notice was 2 mailed to provide one of the following: 3 a. Proof of financial liability coverage as defined in 4 section 321.1, subsection 24B. 5 b. Proof that the owner is exempt from the requirement to 6 maintain proof of financial liability coverage under section 7 321.20B. 8 2. If, after fifteen days, the owner of the motor vehicle 9 fails to provide satisfactory proof of financial liability 10 coverage, the designated agent shall provide a second notice 11 by first-class mail to the owner of the motor vehicle allowing 12 the owner an additional fifteen days from the date the second 13 notice was mailed to provide the information requested under 14 subsection 1. 15 3. a. The designated agent shall update the database 16 regarding each notice sent to a motor vehicle owner under 17 subsections 1 and 2, indicating the information provided by the 18 motor vehicle owner or the owner’s failure to provide proof of 19 financial liability coverage, as applicable. 20 b. If the owner of a motor vehicle provides proof to the 21 department or the designated agent that the owner’s motor 22 vehicle is covered by an acceptable form of financial liability 23 coverage described in section 321.1, subsection 24B, paragraph 24 “b” , “c” , or “d” , the information shall be recorded in the 25 database. 26 c. If the designated agent determines the motor vehicle 27 is appropriately insured using a real-time internet services 28 model, the information shall be recorded in the database. 29 4. a. If the owner of a motor vehicle fails to provide 30 proof of financial liability coverage following receipt of the 31 second notice under subsection 2, the designated agent shall 32 notify the department, and the department shall revoke the 33 registration of the motor vehicle. 34 b. The department shall provide to the owner of the motor 35 -6- LSB 1761HV (2) 87 ns/nh 6/ 15

H.F. 551 vehicle appropriate notice of the revocation, order the owner 1 to surrender the registration plates and registration receipt 2 for the vehicle to the county treasurer, advise the owner of 3 the legal consequences of operating a vehicle with revoked 4 registration and without financial liability coverage, and 5 instruct the owner on how to reinstate the vehicle registration 6 once the owner has obtained financial liability coverage for 7 the vehicle. 8 5. a. A person shall not provide a false or fraudulent 9 statement to the department or the department’s designated 10 agent in regard to proceedings under this chapter. 11 b. In addition to any other penalties, a person who violates 12 paragraph “a” is guilty of a simple misdemeanor. 13 6. A revocation of registration under this chapter is in 14 addition to any other penalty imposed by law. This chapter 15 does not affect other actions or penalties that may be taken or 16 imposed for a violation of section 321.20B or other law. 17 7. a. A registration that has been revoked under this 18 section shall not be reinstated and a new registration shall 19 not be issued to the holder of the revoked registration until 20 the person does all of the following: 21 (1) Pays to the department an administrative reinstatement 22 fee of one hundred dollars, in addition to any other penalty 23 imposed by law. 24 (2) Complies with the requirements of section 321.20B and 25 this chapter. 26 b. Reinstatement fees collected under this subsection shall 27 be retained by the department as repayment receipts as defined 28 in section 8.2 and shall be used exclusively to offset the 29 costs of administering the program, including payments made by 30 the department to the department’s designated agent. 31 Sec. 8. NEW SECTION . 321B.5 Motor vehicle insurance 32 reporting —— penalty. 33 1. a. Except as provided in paragraph “b” , each insurer 34 that issues a policy to a motor vehicle owner in this state 35 -7- LSB 1761HV (2) 87 ns/nh 7/ 15

H.F. 551 that includes motor vehicle liability coverage, uninsured 1 motorist coverage, underinsured motorist coverage, or 2 personal injury coverage shall, on or before the seventh 3 and twenty-first days of each calendar month, submit to the 4 department’s designated agent a record of each motor vehicle 5 insurance policy that was issued by the insurer and in effect 6 for a vehicle registered or garaged in this state as of the 7 date of the previous submission. 8 b. An insurer is not required to provide a record of a motor 9 vehicle insurance policy under paragraph “a” if the policy 10 covers a vehicle that is registered under chapter 326. 11 c. This subsection does not preclude more frequent 12 reporting. 13 2. A record provided by an insurer under subsection 1, 14 paragraph “a” , shall include all of the following: 15 a. The name, date of birth, and driver’s license number, if 16 the insured provides a driver’s license number to the insurer, 17 of each insured owner or operator, and the address of the named 18 insured. 19 b. The make, year, and vehicle identification number of each 20 insured vehicle. 21 c. The policy number and effective date of each policy. 22 3. An insurer shall provide the information required under 23 this section via electronic means or via another means the 24 designated agent agrees to accept. 25 4. a. The department may assess a civil penalty of not more 26 than two hundred fifty dollars for each day an insurer fails to 27 comply with this section. 28 b. If an insurer shows that the failure to comply with this 29 section was inadvertent, accidental, or the result of excusable 30 neglect, the department may waive the civil penalty. 31 c. An insurer that discloses records to the department’s 32 designated agent in a reasonable, good-faith effort to comply 33 with the requirements of this section shall not be subject to a 34 civil penalty under paragraph “a” . 35 -8- LSB 1761HV (2) 87 ns/nh 8/ 15

H.F. 551 Sec. 9. NEW SECTION . 321B.6 Disclosure of database 1 information —— penalty. 2 1. Information provided to the designated agent and 3 information contained in the database under this chapter are 4 confidential and subject to the provisions and penalties of 18 5 U.S.C. §2721. Such information may not be disclosed, except 6 as follows: 7 a. For the purpose of investigating, litigating, or 8 enforcing the financial liability coverage requirements 9 of section 321.20B, the designated agent shall provide an 10 electronic record to a state or local government agency or 11 court verifying motor vehicle financial liability coverage 12 information. 13 b. For the purpose of investigating, litigating, or 14 enforcing the financial liability coverage requirements of 15 section 321.20B, the designated agent shall, upon request, 16 issue to any state or local government agency or court a 17 certificate documenting motor vehicle financial liability 18 coverage, according to the database, of a specific individual 19 or motor vehicle for the time period designated by the 20 government agency or court. 21 c. Upon request, the department or its designated agent 22 shall disclose whether an individual is covered under a motor 23 vehicle insurance policy, proof of the insurance coverage 24 policy, and the insurance company name to: 25 (1) The individual or, if the individual is deceased, 26 any person who is an interested party in the estate of the 27 individual as provided under chapter 633. 28 (2) The parent or legal guardian of the individual if the 29 individual is an unemancipated minor. 30 (3) The legal guardian of the individual if the individual 31 is legally incapacitated. 32 (4) A person who has power of attorney for the individual. 33 (5) A person who submits a notarized release from the 34 individual dated no more than ninety days before the date the 35 -9- LSB 1761HV (2) 87 ns/nh 9/ 15

H.F. 551 request is made. 1 (6) A person suffering loss or injury in a motor vehicle 2 accident in which the individual was involved, but only as part 3 of an accident report as authorized in section 321.271 relating 4 to access to accident reports. 5 d. For the purpose of investigating, enforcing, or 6 prosecuting laws or issuing citations, information related to a 7 motor vehicle owner or operator’s financial liability coverage 8 under section 321.20B may be provided to state or local law 9 enforcement agencies. 10 e. Upon request of a peace officer acting in an official 11 capacity under the provisions of paragraph “d” , the department 12 or the designated agent shall, upon request, disclose relevant 13 information contained in the database. 14 f. For the purpose of the state auditor conducting audits 15 of the program. 16 g. Upon request of a financial institution for the purpose 17 of protecting the financial institution’s bona fide security 18 interest in a motor vehicle. 19 2. a. The department may allow the designated agent to 20 prepare and deliver, upon request, a report on the insurance 21 information of a person or motor vehicle in accordance with 22 this section. The report may be in the form of: 23 (1) A certified copy that is considered admissible in any 24 court proceeding in the same manner as the original. 25 (2) Information accessible through the internet or through 26 another electronic medium if the department determines that 27 sufficient security is provided to ensure compliance with this 28 section. 29 b. The department may allow the designated agent to charge a 30 fee established by the department for each of the following: 31 (1) Authenticating a document, including preparation and 32 delivery of a certified copy. 33 (2) Accessing a record through the internet or through 34 another electronic medium. 35 -10- LSB 1761HV (2) 87 ns/nh 10/ 15

H.F. 551 (3) Providing a record to a financial institution under 1 subsection 1, paragraph “g” . 2 3. The designated agent or any other person who knowingly 3 releases or discloses information from the database for a 4 purpose other than those authorized in this section or to a 5 person who is not entitled to such information is guilty of a 6 class “D” felony. 7 4. Neither the state nor the department’s designated agent 8 shall be liable to any person for gathering, managing, or 9 using the information in the database in compliance with this 10 chapter. 11 5. The designated agent shall be responsible for 12 maintaining and securing the information in the database 13 provided by the department and insurers under sections 321B.3 14 and 321B.5. 15 6. An insurer acting in compliance with this chapter shall 16 not be liable to any person for the disclosure of information 17 supplied to the department or designated agent. The designated 18 agent shall indemnify an insurer against any loss arising from 19 the disclosure of information supplied to the department or 20 designated agent, provided the insurer supplied the information 21 to the department or designated agent in a manner that complies 22 with this chapter and rules adopted pursuant to this chapter. 23 Records provided by an insurer under this chapter shall be 24 deemed evidence of insurance and not a guarantee of insurance. 25 Sec. 10. EFFECTIVE DATE. This Act takes effect July 1, 26 2018. 27 EXPLANATION 28 The inclusion of this explanation does not constitute agreement with 29 the explanation’s substance by the members of the general assembly. 30 This bill establishes a motor vehicle insurance verification 31 program to be administered by the department of transportation 32 (DOT). Following the applicable competitive bidding 33 procedures, the DOT is required to contract with a third 34 party for four years to act as the DOT’s designated agent for 35 -11- LSB 1761HV (2) 87 ns/nh 11/ 15

H.F. 551 administration of the program. 1 The bill provides that a peace officer shall not stop or 2 detain a person solely for a suspected violation of motor 3 vehicle financial liability coverage requirements, and that 4 such requirements are enforceable by a peace officer only as 5 a secondary action when the driver of the vehicle has been 6 stopped or detained for a suspected violation of another 7 provision of law. The bill prohibits the state or a political 8 subdivision of the state from using any automated or remote 9 system equipped with a camera or other optical device to 10 identify persons operating a motor vehicle in violation of 11 motor vehicle financial liability coverage requirements. 12 The bill requires the DOT to establish an advisory council 13 to make recommendations to the DOT on the best methods and 14 practices for implementing a real-time internet services model 15 for insurance verification, to assist in the development of 16 a guide for insurers detailing the data fields and other 17 information necessary for compliance with the bill, and to 18 provide an annual report to the DOT detailing the improvements 19 and implementation efforts relating to insurance verification 20 in other states for consideration in improving compliance and 21 operations in this state. 22 The designated agent is required to establish and maintain a 23 database containing information from insurers relating to motor 24 vehicle insurance coverage for registered motor vehicles, motor 25 vehicle identification information, personal identification 26 information for registered owners of motor vehicles, and any 27 other information provided to the designated agent by the DOT. 28 At least twice per month, the designated agent must update the 29 database and compare current motor vehicle registrations with 30 updated insurance information. If records in the database 31 indicate that a registered motor vehicle is not covered under 32 an owner’s policy of liability insurance, the bill requires the 33 designated agent to use a real-time internet services model 34 to determine if the registered motor vehicle is covered under 35 -12- LSB 1761HV (2) 87 ns/nh 12/ 15

H.F. 551 an owner’s policy of liability insurance. The files in the 1 database must be archived semiannually and audited by the DOT 2 at least annually. 3 If database records and the real-time internet services 4 model show that a registered motor vehicle is not covered under 5 an owner’s policy of liability insurance for three consecutive 6 months, the designated agent is required to send a notice to 7 the owner requiring the owner to respond within 15 days by 8 providing proof of financial liability coverage or proof that 9 the owner is exempt from the requirement to maintain financial 10 liability coverage. If the owner fails to respond, a second 11 notice must be sent. If the owner does not respond to the 12 second notice, the owner’s motor vehicle registration must 13 be revoked by the DOT and the owner is required to surrender 14 the registration plates and registration receipt for the 15 vehicle to the county treasurer. In order to obtain a new 16 registration for the vehicle, the owner must comply with 17 financial responsibility requirements and pay an administrative 18 fee of $100. The fees collected are to be used by the DOT 19 exclusively to offset the costs of administering the program, 20 including payments made to the designated agent. 21 The bill provides that if a motor vehicle is covered by a 22 form of financial liability coverage other than an insurance 23 policy, or if a real-time internet services model indicates a 24 vehicle is appropriately insured, that fact shall be noted in 25 the database. 26 The bill prohibits a person from providing false or 27 fraudulent information to the DOT or the DOT’s designated 28 agent in relation to the motor vehicle insurance verification 29 program. A violation of this provision is a simple 30 misdemeanor. 31 The bill requires each insurer that issues a policy to the 32 owner of a motor vehicle that includes motor vehicle liability 33 coverage, uninsured motorist coverage, underinsured motorist 34 coverage, or personal injury coverage to, before the 7th and 35 -13- LSB 1761HV (2) 87 ns/nh 13/ 15

H.F. 551 the 21st of each month, provide the DOT’s designated agent with 1 a record of each motor vehicle insurance policy issued by the 2 insurer and in effect for vehicles registered or garaged in 3 the state as of the date of the previous submission. Vehicles 4 subject to apportioned registration under Code chapter 326 are 5 not included in this requirement. Insurers that fail to comply 6 with the reporting requirement may be assessed a civil penalty 7 of $250 per day. However, the DOT may waive the penalty upon a 8 showing that the failure was inadvertent, accidental, or the 9 result of excusable neglect. An insurer that discloses records 10 to the DOT’s designated agent in a reasonable, good-faith 11 effort to comply with the bill is not subject to the penalty. 12 Information contained in the database is confidential, but 13 the bill provides exceptions for certain disclosures, including 14 disclosures to state or local government agencies and courts 15 for specified purposes, to individuals and certain other 16 authorized persons, for purposes of an accident investigation, 17 to law enforcement agencies and peace officers for certain 18 official purposes, to the state auditor, and to financial 19 institutions with a security interest in a motor vehicle. 20 The designated agent may be authorized by the DOT to provide 21 certified copies or electronic records, as appropriate, and to 22 charge a fee for the provision of records and authentication 23 of documents. 24 A person, including the designated agent, who knowingly 25 releases or discloses information from the database for a 26 purpose other than those authorized in the bill or to a person 27 who is not entitled to such information is guilty of a class 28 “D” felony. 29 The bill provides that the state and the DOT’s designated 30 agent are not liable to any person for gathering, managing, or 31 using the information in the database in compliance with the 32 bill. The bill further provides that the designated agent is 33 responsible for maintaining and securing the information in the 34 database provided by the DOT and insurers, and insurers acting 35 -14- LSB 1761HV (2) 87 ns/nh 14/ 15

H.F. 551 in compliance with the bill are not liable to any person for 1 the disclosure of information supplied to the DOT or designated 2 agent. The bill requires the designated agent to indemnify 3 an insurer against any loss arising from the disclosure of 4 information supplied to the DOT or designated agent, provided 5 the insurer supplied the information to the DOT or designated 6 agent in a manner that complies with the bill. 7 The bill takes effect July 1, 2018. 8 -15- LSB 1761HV (2) 87 ns/nh 15/ 15