ASSEMBLY, No. 151

STATE OF NEW JERSEY

220th LEGISLATURE

 

PRE-FILED FOR INTRODUCTION IN THE 2022 SESSION

 


 

Sponsored by:

Assemblyman  HAROLD "HAL" J. WIRTHS

District 24 (Morris, Sussex and Warren)

Assemblyman  ROY FREIMAN

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

Assemblyman  PARKER SPACE

District 24 (Morris, Sussex and Warren)

 

 

 

 

SYNOPSIS

     “Motor Vehicle Insurance Verification Act”; requires Motor Vehicle Commission to establish online motor vehicle insurance verification system.

 

CURRENT VERSION OF TEXT

     Introduced Pending Technical Review by Legislative Counsel.

  


An Act concerning an online verification system for motor vehicle insurance.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    This act shall be known and may be cited as the “Motor Vehicle Insurance Verification Act.”

 

     2.    a.  Notwithstanding any other law to the contrary, the New Jersey Motor Vehicle Commission (hereinafter the “commission”) shall establish an accessible system for online verification of the evidence of motor vehicle insurance in accordance with the provisions of this act.  The goal of the system shall be to assist in the identification of uninsured motorists in the most effective way possible.

     b.    Motor vehicle insurers authorized to do business in this State (hereinafter “insurers”) shall provide policy information for the on-line insurance verification system and otherwise cooperate with the commission in establishing the system in accordance with the provisions of this act.

     c.     The online insurance verification system established by this act shall be the sole system used in this State for the purpose of verifying evidence of motor vehicle insurance required by the laws of this State.  Implementation of the on-line insurance verification system shall supersede and replace any motor vehicle insurance verification system used in this State on the effective date of this act.

 

     3.    a.  The commission shall develop and implement an online insurance verification system that meets all of the following requirements:

     (1)   The verification system shall allow for requests to be sent to insurers for verification of evidence of insurance via web services established by the insurers, through the Internet, world wide web or a similar proprietary or common carrier electronic system, in compliance with the specifications and standards of the Insurance Industry Committee on Motor Vehicle Administration (hereinafter “IICMVA”), with enhancements, additions, and modification as required by the commission so long as they do not conflict, nullify, or add requirements that are inconsistent with the specifications and standards of the IICMVA.  The verification system shall include appropriate provisions to secure its data against unauthorized access and the commission shall maintain a historical record of the system data for a period of six to twelve months from the date of each request and response.

     (2)   The verification system shall be used for verification of the evidence of mandatory motor vehicle insurance coverage as prescribed by the laws of the State.  The verification system shall be made accessible to all law enforcement officers for the purpose of enforcing the mandatory motor vehicle insurance requirements of section 1 of P.L.1972, c.197 (C.39:6B-1) through capabilities for real-time verification of compliance with mandatory insurance requirements at traffic stops and other appropriate events.  The verification system shall be also accessible to authorized personnel of the commission, the courts, and any other entities authorized by the State as permitted by State or federal privacy laws, and it shall be interfaced, wherever appropriate, with existing State systems.  

     (3)   The verification system shall include information to enable the commission to make inquiries to insurers about evidence of insurance in a manner that is consistent with insurance industry and IICMVA recommendations, specifications, and standards by using multiple data elements for greater matching accuracy, including the following: NAIC (National Association of Insurance Commissioners) insurance company code, Vehicle Identification Number, policy number, or otherwise as described in the specifications and standards of the IICMVA.

     (4)   The commission may adopt rules and regulations to provide to insurers who write a minimum number of policies, as determined by the commission, the authority to use an alternative method for reporting insurance policy data instead of establishing the web services otherwise required by this act.

     b.    The commission shall maintain the online insurance verification system in a manner that allows the system to respond to a requestor entitled to use the system within a time period to be established by the commission.  An insurer shall maintain its part of the system in a manner that allows the system to respond to a requestor entitled to use the system within the time period prescribed by the IICMVA’s specifications and standards.

     c.     The commission shall consult with representatives of the insurance industry and private Internet service providers to determine the objectives, details, and deadlines related to the online insurance verification system.

     d.    The commission shall publish for public comment, and then issue, a detailed guide of its online insurance verification system.

     e.     The commission and its private service provider, if any, shall each maintain a contact person for insurers during the establishment, implementation, and operation of the online insurance verification system.

     f.     When the commission has reason to believe that a motor vehicle has been or is currently being operated without insurance, the commission may suspend or revoke the owner’s motor vehicle registration in accordance with the provisions of section 50 of P.L.1990, c.8 (C.17:33B-41) and other applicable provisions of New Jersey law.  The registration shall not be reinstated and a new registration shall not be issued unless evidence of insurance has been provided to the commission and any applicable reinstatement fees as prescribed by the commission have been paid.  These fees shall be in addition to any other applicable fines, penalties, and fees.

     g.    Nothing in this act shall be construed to prohibit the commission from contracting with a private Internet service provider or providers who have successfully implemented similar systems in other states to assist in establishing and maintaining the online insurance verification system.

     h.    In addition to the online insurance identification system provided for by this act, if the commission has reason to believe that a motor vehicle owner does not have valid motor vehicle insurance as required under State law, it may request an insurer to verify the existence of a motor vehicle insurance policy in a manner and a time period to be prescribed by the commission but not greater than 30 days from the date the request is made.  

     i.     An insurer shall cooperate with the commission in establishing and maintaining the online insurance verification system, and shall provide access to motor vehicle insurance policy status information in accordance with a process to be prescribed by the commission by regulation.  An insurer shall comply with this section’s requirements for verification of evidence of motor vehicle insurance for every motor vehicle insured by that company in New Jersey.  An insurer shall maintain a historical record of its system data for a minimum period of six months from the date of the request and response.

     j.     This section shall not apply to vehicles insured under commercial motor vehicle insurance coverage, except that an insurer of such vehicles may participate on a voluntary basis.  For the purposes of this section, “commercial motor vehicle coverage” means any coverage provided to an insured, regardless of the number of vehicles or the entity covered, under a commercial coverage form and rated from a commercial manual approved by the Department of Banking and Insurance.

     k.    An insurer shall provide insureds who have commercial motor vehicle insurance coverage in New Jersey with that insurer with sufficient evidence reflecting that the motor vehicle is insured under a commercial motor vehicle insurance policy. Sufficient evidence includes an insurance identification card clearly marked in the title with the identifier: “Commercial Motor Vehicle Insurance Identification Card.”

     l.     Nothing in this section shall be construed to prohibit an insurer from using the services of a third party vendor to facilitate the insurer’s requirements with respect to the online insurance verification system.

     m.   An insurer shall be immune from civil and administrative liability unless the insurer has failed to undertake good faith efforts to comply with the provision of this act. The insurer shall not be civilly liable for any amount in excess of the actual damages sustained by a person or entity for a violation of this act.

 

     4.    Not more than two years after the establishment of the online insurance verification system pursuant to this act, the New Jersey Motor Vehicle Commission, after consultation with representatives of the motor vehicle insurance industry, shall report to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), as to the costs for the system, incurred by the commission, insurers, and the public, and the effectiveness of the system in reducing the number of uninsured motor vehicles in the State.

 

     5.    The commission shall establish a pilot program for a period of at least nine months during which the online insurance verification system shall be tested.  The commission shall ensure that the pilot program is successfully tested and the verification system is fully operational within one year of the effective date of this act.  No enforcement action that is based on the system shall be taken until the commission has determined that the pilot program has been successfully completed.

 

     6.    The Chief Administrator of the New Jersey Motor Vehicle Commission, in consultation with the Commissioner of Banking and Insurance, shall adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations to effectuate the purposes of this act, including provisions for imposing appropriate civil penalties for any violation of the act.

 

     7.    This act shall become effective on the 90th day next following enactment, but the Chief Administrator of the New Jersey Motor Vehicle Commission may take any anticipatory administrative action in advance thereof as shall be necessary for the implementation of this act.

 

 

STATEMENT

 

     This bill, entitled the “Motor Vehicle Insurance Verification Act,” requires the New Jersey Motor Vehicle Commission to establish a system for the online verification of evidence of motor vehicle insurance, to assist in the identification of uninsured motorists.  The bill also requires motor vehicle insurers to provide policy information for the online insurance verification system and to otherwise cooperate with the commission in establishing the system.

     The bill specifies certain requirements for the verification system, including that: (1) the online insurance verification system comply with certain standards of the Insurance Industry Committee on Motor Vehicle Administration (IICMVA); (2) the system be accessible to all law enforcement officers for the purpose of enforcing the mandatory motor vehicle insurance requirements of section 1 of P.L.1972, c.197 (C.39:6B-1) through capabilities for real-time verification of compliance with mandatory insurance requirements at traffic stops and other appropriate events; (3) the system include information to enable the commission to make inquiries to insurers about evidence of insurance; and (4) the commission may adopt rules and regulations to provide insurers who write a minimum number of policies, to be determined by the commission, the authority to use an alternative method for reporting insurance policy data.

     The bill also requires the commission to take other actions with respect to the verification system, including maintaining the system in a manner that allows it to be responsive to requestors, consulting with the insurance industry and private service providers, and maintaining a contact person.

     The bill also requires motor vehicle insurers authorized to do business in the State to cooperate with the commission in establishing and maintaining the system, to verify evidence of insurance for every motor vehicle insured by that company, and to maintain certain records regarding system data.

     The bill provides that when the commission has reason to believe that a motor vehicle has been or is currently being operated without insurance, the commission may suspend or revoke the owner’s motor vehicle registration.  The registration shall not be reinstated and a new registration shall not be issued unless evidence of insurance has been provided to the commission and any applicable reinstatement fees as prescribed by the commission have been paid.  These fees shall be in addition to any other applicable fines, penalties, and fees.

     The bill also provides that not more than two years after the establishment of the online insurance verification system, the New Jersey Motor Vehicle Commission, after consultation with representatives of the motor vehicle insurance industry, shall report to the Governor and to the Legislature as to the costs for the system incurred by the commission, insurers and the public, and the effectiveness of the system in reducing the number of uninsured motor vehicles in the State.

     The bill requires the commission to establish a pilot program for a period of at least nine months during which the online insurance verification system shall be tested.  The commission shall ensure that the pilot program is successfully tested and the verification system is fully operational within one year of the effective date of the bill.  The bill provides that no enforcement action that is based on the system shall be taken until the commission has determined that the pilot program has been successfully completed.

     The bill requires the Chief Administrator of the New Jersey Motor Vehicle Commission, in consultation with the Commissioner of Banking and Insurance, to adopt, pursuant to the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations to effectuate the purposes of the bill, including provisions for imposing appropriate civil penalties for any violation of the bill.

     The bill provides that it becomes effective on the 90th day next following enactment, but the Chief Administrator of the New Jersey Motor Vehicle Commission may take any anticipatory administrative action in advance thereof as shall be necessary for the implementation of the bill’s provisions.