2013 -- S 0567

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LC01240

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO MOTOR AND OTHER VEHICLES - ONLINE MOTOR VEHICLE

INSURANCE VERIFICATION

     Introduced By: Senators DiPalma, Lombardi, and Ciccone

     Date Introduced: February 28, 2013

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 31 of the General Laws entitled "MOTOR AND OTHER

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VEHICLES" is hereby amended by adding thereto the following chapter:

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     CHAPTER 32.1

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ONLINE MOTOR VEHICLE INSURANCE VERIFICATION ACT

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     31-32.1-1. Short title. -- This act shall be known and may be cited as "The Online Motor

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Vehicle Insurance Verification Act."

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     31-32.1-2. Establishment of online system. -- The division of motor vehicles

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(hereinafter "division") shall establish an accessible common carrier based system for online

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verification of the evidence of vehicle liability insurance, as specified; requiring motor vehicle

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insurers to provide policy information for the online verification system, as specified, providing

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an appropriation; and providing for an effective date. Implementation of an online verification

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system, including any exceptions as provided for in this chapter or in the user guide developed to

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support the program, supersedes any existing verification system and shall be the sole system

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used for the purpose of verifying evidence of mandatory liability insurance as prescribed by the

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laws of the state.

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     31-32.1-3. Adoption of rules. -- The division shall adopt by rule and regulation online

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verification of evidence of insurance as required by this section, subject to the following:

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     (1) Unless otherwise described herein, the online verification of evidence of insurance

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system that is adopted shall be the sole and exclusive system for insurers' reporting and verifying

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evidence of insurance.

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     (2) The verification system shall send requests to insurers for verification of evidence of

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insurance via web services established by the insurers, through the internet, world wide web or a

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similar proprietary or common carrier electronic system, in compliance with the specifications

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and standards of the Insurance Industry Committee on Motor Vehicle Administration (IICMVA),

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with enhancements, additions, and modifications as required by the division, but which do not

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conflict, nullify, or add requirements that are inconsistent with the specifications and standards of

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the IICMVA. The system shall include appropriate provisions to secure its data against

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unauthorized access and shall maintain a historical record of all system requests and responses for

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a period of at least six (6) months from the date of such requests and responses.

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     (3) The system shall be used for verification of the evidence of mandatory liability

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insurance coverage as prescribed by the laws of the state and shall be accessible to authorized

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personnel of the division, the courts, law enforcement personnel, and any other entities

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authorized by the state as permitted by state or federal privacy laws, and it shall be interfaced,

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wherever appropriate, with existing state systems. The system shall include information which

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will enable the division to make inquiries to insurers of evidence of insurance that is consistent

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with insurance industry and IICMVA recommendations, specifications and standards by using

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multiple data elements for greater matching accuracy, specifically: Insurer NAIC (National

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Association of Insurance Commissioners) company code, vehicle identification number, policy

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number, or as described in the specifications and standards of the IICMVA.

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     (4) At the discretion of the division, rules and regulations may be established to offer

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insurers, who write fewer policies, an alternative method for reporting insurance policy data

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instead of establishing web services.

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     31-32.1-4. Suspension or revocation of registration. -- When the division has reason to

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believe a motor vehicle has been or is currently being operated without insurance, the owner's

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vehicle registration may be suspended or revoked. The registration may not be reinstated or a new

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registration may not be issued unless evidence of insurance has been provided to the division and

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any applicable reinstatement fees as prescribed by the division have been paid. These fees are in

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addition to any other applicable fines, penalties, and fees.

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     31-32.1-5. Creation of advisory council. -- The division shall consult with

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representatives of the insurance industry and private service providers in determining the

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objectives, details, and deadlines related to the system.

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     31-32.1-6. Contact person. -- The division and its private service provider, if any, each

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shall maintain a contact person for insurers during the establishment, implementation, and

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operation of the system.

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     31-32.1-7. Compliance. -- Every property and casualty insurance company that is

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licensed to issue motor vehicle insurance policies or is authorized to do business in Rhode Island

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shall comply with this chapter for verification of evidence of vehicle insurance for every vehicle

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insured by that company in Rhode Island as required by the rules and regulations of the

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department.

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     31-32.1-8. Civil and administrative immunity. -- Insurers shall be immune from civil

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and administrative liability for good faith efforts to comply with the terms of this chapter.

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     31-32.1-9. Commercial exemption. -- For the purposes of this chapter, commercial auto

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coverage is defined as any coverage provided to an insured, regardless of number of vehicles or

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entities covered, under a commercial coverage form and rated from a commercial manual

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approved by the commissioner of insurance. This section shall not apply to vehicles insured under

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commercial auto coverage; however, insurers of such vehicles may participate on a voluntary

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basis.

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     31-32.1-10. Fee. -- The division shall have the authority to impose a fee of one dollar

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($1.00) on each vehicle registration (new and renewal). All fees collected shall be deposited in a

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separate account and shall be used solely for the purpose of the development, implementation,

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maintenance and enhancement of the online evidence of insurance verification system.

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      31-32.1-11. Report on effectiveness. -- Not more than six (6) months after the online

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insurance verification system has been in operation for two (2) years, the division, after

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consultation with law enforcement, other state agencies, and the insurers, shall report to the

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legislature as to the benefits and the costs of the program for the division, law enforcement, other

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state agencies, the insurers and the public and the effectiveness of the program in reducing the

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number of uninsured motor vehicles.

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     SECTION 2. The updated system shall be installed and fully operational by July 1, 2014,

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following the appropriate testing/pilot period not less than nine (9) months until the successful

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completion of the testing/pilot period, no enforcement action shall be based on the system.

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     This act shall take effect upon passage.

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LC01240

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO MOTOR AND OTHER VEHICLES - ONLINE MOTOR VEHICLE

INSURANCE VERIFICATION

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     This act would create an online system to verify the existence of liability insurance on

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every registered motor vehicle. The updated system would be installed and fully operational by

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July 1, 2014, following the appropriate testing/pilot period not less than nine (9) months until the

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successful completion of the testing/pilot period, no enforcement action would be based on the

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system.

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     This act would take effect upon passage.

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LC01240

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