Establishing a motor vehicle insurance verification program, establishing fees, providing penalties, and including effective date provisions

The designated agent is required to establish and maintain a database containing information from insurers relating to motor vehicle insurance coverage for registered motor vehicles, motor vehicle identification information, personal identification information for registered owners of motor vehicles, and any other information provided to the designated agent by the DOT. At least monthly, the designated agent must update the database and compare current motor vehicle registrations with updated insurance information. If records in the database indicate that a registered motor vehicle is not covered under an owner’s policy of liability insurance, the bill requires the designated agent to use a real-time internet services model to determine if the registered motor vehicle is covered under an owner’s policy of liability insurance. The files in the database must be archived semiannually and audited by the DOT at least annually. If database records and the real-time internet services model show that a registered motor vehicle is not covered under an owner’s policy of liability insurance for two consecutive months, the designated agent is required to send a notice to the owner requiring the owner to respond within days by providing proof of financial liability coverage or proof that the owner is exempt from the requirement to maintain financial liability coverage. If the owner fails to respond, a second notice must be sent. If the owner does not respond to the second notice, the owner’s motor vehicle registration must be suspended by the DOT and the owner is required to surrender the registration plates and registration receipt for the vehicle to the county treasurer. In order to reinstate the registration for the vehicle, the owner must comply with financial responsibility requirements and pay an administrative fee of $100. The bill provides that percent of the fees collected are to be used by the DOT exclusively to offset the costs of administering the program, including payments made to the designated agent.25. That fund is used to assist counties by matching moneys spent for the acquisition of equipment for the provision of emergency medical services and by providing grants for education and training in the delivery of emergency medical services. The bill provides that if a motor vehicle is covered by a form of financial liability coverage other than an insurance policy, or if a real-time internet services model indicates a vehicle is appropriately insured, that fact shall be noted in the database. The bill prohibits a person from providing false or fraudulent information to the DOT or the DOT’s designated agent in relation to the motor vehicle insurance verification program. A violation of this provision is a simple misdemeanor. A simple misdemeanor is punishable by confinement for no more than days and a fine of at least $105 but not more than $855. The bill requires each insurer that issues a policy to the owner of a motor vehicle that includes motor vehicle liability coverage, uninsured motorist coverage, underinsured motorist coverage, or personal injury coverage to, before the 7th and the 21st of each month, provide the DOT’s designated agent with a record of each motor vehicle insurance policy issued by the insurer and in effect for vehicles registered or garaged in the state as of the date of the previous submission. Vehicles subject to apportioned registration under Code chapter 326 are not included in this requirement. Insurers that fail to comply with the reporting requirement may be assessed a civil penalty of $250 per day. Civil penalties collected under the bill are deposited in the road use tax fund. However, the DOT may waive the penalty upon a showing that the failure was inadvertent, accidental, or the result of excusable neglect. An insurer that discloses records to the DOT’s designated agent in a reasonable, good-faith effort to comply with the bill is not subject to the penalty. Information contained in the database is confidential, but the bill provides exceptions for certain disclosures, including disclosures to state or local government agencies and courts for specified purposes, to individuals and certain other authorized persons, for purposes of an accident investigation, to law enforcement agencies and peace officers for certain official purposes, to the state auditor, and to financial institutions with a security interest in a motor vehicle. The designated agent may be authorized by the DOT to provide certified copies or electronic records, as appropriate, and to charge a fee for the provision of records and authentication of documents. A person, including the designated agent, who knowingly releases or discloses information from the database for a purpose other than those authorized in the bill or to a person who is not entitled to such information is guilty of a class “D” felony. A class “D” felony is punishable by confinement for no more than five years and a fine of at least $1,025 but not more than $10,245. The bill provides that the state and the DOT’s designated agent are not liable to any person for gathering, managing, or using the information in the database in compliance with the bill. The bill further provides that the designated agent is responsible for maintaining and securing the information in the database provided by the DOT and insurers, and insurers acting in compliance with the bill are not liable to any person for the disclosure of information supplied to the DOT or designated agent. The designated agent is required to indemnify an insurer against any loss arising from a disclosure, provided the insurer supplied the information in compliance with the bill. The bill takes effect July 1, 2025.