SB94

Report Title:

Motor Vehicle Insurance; Statewide Database

Description:

Appropriates general funds for a private contractor to develop and operate a motor vehicle insurance database that is interactive with the statewide motor vehicle registration computer file and operational by 1/1/07.

THE SENATE	S.B. NO.	94
TWENTY-THIRD LEGISLATURE, 2005
STATE OF HAWAII

A BILL FOR AN ACT

relating to motor vehicle insurance.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature has firmly established that the privilege of driving a motor vehicle must be conditioned upon the ability to adequately compensate those who are injured as the result of a motor vehicle accident. This requires that all drivers participate in Hawaii’s motor vehicle insurance system. The legislature finds, however, that the system has failed to encourage adequate participation as evidenced by the percentage of uninsured drivers, which has been estimated by a variety of sources to be as high as thirty-five per cent.

The legislature further finds that one of the primary reasons for this failure is the lack of an effective mechanism to provide law enforcement officers with immediate access to accurate data that would allow them to determine whether a vehicle is uninsured. This Act is intended to establish a statewide information system that uses the most current technology to enable law enforcement officers and the judiciary to immediately and accurately determine whether a driver has motor vehicle insurance in compliance with state law. The legislature is confident that the creation, maintenance, and use of this information system will significantly increase the level of participation in Hawaii’s motor vehicle insurance system and thereby enhance the fairness of the system for all of Hawaii’s citizens by more equitably distributing insurance costs among all drivers, and more effectively compensating the victims of motor vehicle accidents.

SECTION 2. Section 431:10C-107, Hawaii Revised Statutes, is amended to read as follows:

"§431:10C-107 Verification of insurance: motor vehicles. (a) Every insurer shall issue to its insureds a motor vehicle insurance identification card for each motor vehicle for which the basic motor vehicle insurance coverage is written. The identification card shall [~~contain~~]:

(1) Contain the following:

[~~(1)~~] (A) Name of make and factory or serial number of the motor vehicle; provided that insurers of five or more motor vehicles which are under common registered ownership and used in the regular course of business shall not be required to indicate the name of make and the factory or serial number of each motor vehicle;

[~~(2)~~] (B) Policy number;

[~~(3)~~] (C) Names of the insured and the insurer; and

[~~(4)~~] (D) Effective dates of coverage including the expiration date[.

~~(b) The identification card shall be~~];

(2) Be in the insured motor vehicle at all times and shall be exhibited to a law enforcement officer upon demand[.

~~(c) The identification card shall be~~];

(3) Be resistant to forgery by whatever means appropriate. The commissioner shall approve the construction, form, and design of the identification card to ensure that the card is forgery resistant[.

~~(d) The commissioner shall issue a certificate of self-insurance periodically, as necessary, for use in each motor vehicle insured under section 431:10C-105.~~

~~(e) The identification card issued by an insurer shall not~~]; and

(4) Not be issued for a period exceeding the period for which premiums have been paid or earned; provided that this [~~subsection~~] paragraph shall apply only to the first application of a person for a motor vehicle insurance policy and shall not apply to applications for commercial and fleet vehicles.

(b) The commissioner shall issue a certificate of self-insurance periodically, as necessary, for use in each motor vehicle insured under section 431:10C-105.

(c) Every insurer shall establish and maintain an information system that enables the insurer to electronically transmit vehicle identification numbers of insured and uninsured vehicles to the motor vehicle insurance database maintained by the city and county of Honolulu.

(d) An insurer shall transmit the vehicle identification number of an insured vehicle, of vehicles for which the insurance policy has lapsed or been terminated or cancelled, and any other information deemed necessary by the city and county of Honolulu, to the motor vehicle insurance database according to procedures established by the city and county of Honolulu; provided that insurers of a fleet of five or more motor vehicles under common registered ownership and used in the regular course of business shall not be required to transmit vehicle identification numbers of those vehicles under this subsection. Transmission shall occur as soon as possible after, and in any event no later than ten working days from the effective date, or date of termination, lapse, or cancellation of the policy.

(e) No insurer shall be subject to civil liability for errors or omissions in the recording, maintenance, or reporting of information required by subsections (c) and (d), except for such damages that result from the insurer's gross negligence or wanton acts or omissions."

SECTION 3. (a) The motor vehicle and licensing division of the city and county of Honolulu shall coordinate with a qualified contractor selected by the insurance commissioner pursuant to subsection (b) to develop and operate a database to receive the data that is required to be electronically transmitted by section 431:10C-107, Hawaii Revised Statutes, as amended by section 2 of this Act. The database shall:

(1) Be interactive with the motor vehicle registration computer file;

(2) Be capable, on a continuous basis, of receiving the data from all insurers and of being remotely accessed by all state, judiciary, and county law enforcement officers having authority to enforce the provisions of article 10C of chapter 431, Hawaii Revised Statutes; and

(3) Incorporate adequate technologies to manage, safeguard, and selectively control access to the database, including distributed information acuity manager, cross-platform audit log correlator security manager, and real-time security situational awareness.

(b) The insurance commissioner, pursuant to chapter 103D, Hawaii Revised Statutes, shall select a qualified contractor or contractors from a list of prequalified contractors to:

(1) Work with the motor vehicle and licensing administrator and with insurers and appropriate state and county agencies to develop and maintain the database and any necessary processes that will minimize the costs of compliance for insurers and state and county agencies; and

(2) Develop, maintain, and operate a designated government statewide information system database that is capable of being accessed by all state, judiciary, and county law enforcement officers having authority to enforce the provisions of article 10C of chapter 431, Hawaii Revised Statutes.

(1) Be responsible for paying all costs associated with the establishment, development, maintenance, installation, and operation of the database and statewide information system, including costs incurred by the department of commerce and consumer affairs, the judiciary's traffic violations bureau, and the city and county of Honolulu; and

(2) Be reimbursed a percentage of fines collected pursuant to section 431:10C-117(a)(2), Hawaii Revised Statutes, from persons who have been convicted of not having had a motor vehicle insurance policy in effect at the time the citation was issued; provided that the percentage of fines shall be:

(A) Based on the amount that is finally adjudicated by the court, not the amount of the original citation;

(B) Determined by contract between the State and the contractor; and

(d) The database and statewide information system shall be fully developed and operational no later than January 1, 2007.

SECTION 4. (a) To increase compliance with the motor vehicle insurance requirements of chapter 431, article 10C, Hawaii Revised Statutes, the insurance commissioner, in consultation with the contractor selected pursuant to section 3(b) of this Act, shall establish an audit system within the statewide information system database, in coordination with the city and county of Honolulu, to identify registered motor vehicles whose motor vehicle insurance coverage has lapsed.

(b) As part of the audit, the insurance commissioner shall review the feasibility of requiring the contractor, by contract with the State, in coordination with the city and county of Honolulu and the traffic violations bureau of the judiciary, to notify registered owners of motor vehicles whose motor vehicle insurance policies have lapsed or been terminated or cancelled and have not been renewed, of the following:

(1) The fact that the registered owner's motor vehicle insurance has lapsed and the penalties provided by law for nonrenewal;

(2) The duty of the registered owner to obtain minimum motor vehicle insurance coverage and provide proof of that insurance to the contractor within twenty days of the date of notice;

(3) A provision that failure to provide proof of insurance within twenty days will result in a fine of $ payable to the traffic violations bureau of the judiciary, to be deposited to the credit of the state general fund.

(c) The insurance commissioner shall report findings and recommendations, including any proposed implementing legislation, to the legislature no later than twenty days before the convening of the regular session of 2006.

SECTION 5. There is appropriated out of the general revenues of the State of Hawaii the sum of $1, or so much thereof as may be necessary for fiscal year 2005-2006 and the same sum or so much thereof as may be necessary for fiscal year 2006-2007, for the purposes of this Act.

The sum appropriated shall be expended by the city and county of Honolulu for the purposes of this Act.

SECTION 6. There is appropriated out of the general revenues of the State of Hawaii the sum of $1, or so much thereof as may be necessary for fiscal year 2005-2006, and the same sum, or so much thereof as may be necessary for fiscal year 2004-2005, for the purposes of this Act.

The sum appropriated shall be expended by the insurance commissioner for the purposes of this Act.

SECTION 7. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 8. This Act shall take effect on January 1, 2006; provided that sections 3, 4, 5, and 6 shall take effect on July 1, 2005.

INTRODUCED BY:	_____________________________