STATE OF NEW YORK
________________________________________________________________________
9844
IN SENATE
June 4, 2024
___________
Introduced by Sen. BRESLIN -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the vehicle and traffic law, in relation to establishing
an online insurance verification system for motor vehicle insurance
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivisions 2, 3 and 4 of section 313 of the vehicle and
2 traffic law, subdivision 2 as amended by chapter 678 of the laws of
3 1997, paragraphs (a), (b) and (d) of subdivision 2 and subdivision 4 as
4 amended by chapter 509 of the laws of 1998, paragraph (b) of subdivision
5 4 as amended by chapter 161 of the laws of 2004, paragraph (d) of subdi-
6 vision 4 as further amended by section 104 of part A of chapter 62 of
7 the laws of 2011, subdivision 3 as amended by chapter 781 of the laws of
8 1983, are amended to read as follows:
9 2. (a) [Upon] Except as otherwise provided in sections three hundred
10 twelve-b and three hundred twelve-c of this article, the termination of
11 an owner's policy of liability insurance, other than an owner's policy
12 of liability insurance for a motorcycle, at the request of the insured
13 or by cancellation by the insurer, the insurer shall file a notice of
14 termination with reference to such policy, as opposed to any insured
15 vehicle or vehicles under such policy, with the commissioner not later
16 than thirty days following the effective date of such cancellation or
17 other termination, in accordance with the regulations required by para-
18 graph (c) of this subdivision. An insurer shall not file a notice of
19 termination with the commissioner except as required by this subdivi-
20 sion.
21 (b) [Upon] Except as otherwise provided in sections three hundred
22 twelve-b and three hundred twelve-c of this article, upon the issuance
23 of an owner's policy of liability insurance the insurer shall file a
24 notice or confirmation of issuance with reference to such policy not
25 later than fourteen days following the effective date of such issuance,
26 and not later than seven days following the effective date for policies
27 issued after January first, two thousand one, in accordance with the
28 regulations required by paragraph (c) of this subdivision.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10946-06-4
S. 9844 2
1 (c) The commissioner shall promulgate regulations establishing proce-
2 dures for issuance of proof of insurance and, except as otherwise
3 provided in sections three hundred twelve-b and three hundred twelve-c
4 of this article, for reporting by insurers of notices of termination and
5 policy issuance, either electronically or by paper copy, at the option
6 of the department. Such reporting or, if required pursuant to sections
7 three hundred twelve-b and three hundred twelve-c of this article, such
8 online verification shall be required for every cancellation or termi-
9 nation which is effective on or after July first, nineteen hundred
10 eighty-four and for every policy issuance which is effective on or after
11 January first, two thousand[; provided, however, that should the commis-
12 sioner find, after testing of reporting procedures, that it would be
13 feasible to require reporting for policy cancellations, terminations or
14 issuances effective on an earlier date, he may by regulation so require
15 reporting on such earlier date, but in no event shall reporting be
16 required for cancellations or terminations effective prior to February
17 first, nineteen hundred eighty-four nor for policy issuances effective
18 prior to September first, nineteen hundred ninety-nine. Insurers shall
19 cooperate fully with the commissioner in any such testing of reporting
20 procedures].
21 (d) Upon application by an insurer, the commissioner may extend the
22 period for filing of notices of termination by such insurer pursuant to
23 paragraph (c) of this subdivision for up to fifteen days, and for seven
24 days for policies issued by an insurer. Extensions shall not be granted
25 unless the insurer demonstrates to the satisfaction of the commissioner
26 that compliance with the notice period would result in substantial hard-
27 ship to the insurer. The commissioner shall maintain a list of exten-
28 sions granted pursuant to this paragraph.
29 (e) Notwithstanding the provisions of paragraphs (b), (c) and (d) of
30 this subdivision, the commissioner may, in lieu of promulgating regu-
31 lations for reporting by insurers to the department of notices of termi-
32 nation and policy issuance either electronically or by paper copy pursu-
33 ant to such paragraphs, promulgate regulations pursuant to sections
34 three hundred twelve-b and three hundred twelve-c of this article estab-
35 lishing procedures for online verification by motor vehicle insurers of
36 motor vehicle owners' policies of liability insurance to the department.
37 3. A cancellation or termination for which notice is required to be
38 filed with the commissioner pursuant to subdivision two of this section
39 or which must be verified online pursuant to sections three hundred
40 twelve-b and three hundred twelve-c of this article shall not be effec-
41 tive with respect to persons other than the named insured and members of
42 the insured's household until the insurer has filed a notice thereof
43 with the commissioner or verified such cancellation or termination
44 online, as applicable, or until another insurance policy covering the
45 same risk has been procured, except that a notice filed with the commis-
46 sioner, in the format prescribed by the commissioner, within the period
47 prescribed in subdivision two of this section, or a verification made
48 online in compliance with sections three hundred twelve-b and three
49 hundred twelve-c of this article, shall be effective as of the date
50 certified therein, regardless of whether a suspension order is issued
51 pursuant to section three hundred eighteen of this article. A receipt
52 from the department stating that a notice of termination has been filed
53 shall be deemed conclusive evidence of such filing. An insurer shall
54 cooperate with the commissioner in attempting to identify persons not in
55 compliance with this article in cases where the information reported by
S. 9844 3
1 the insurer does not correspond with records maintained by the depart-
2 ment.
3 4. Notwithstanding any other provision of this article to the contra-
4 ry, the commissioner shall establish a [pilot] program to maintain an
5 up-to-date insured vehicle identification database to assist in identi-
6 fying uninsured motor vehicles. Such [databases] database shall be
7 implemented by the department pursuant to standards prescribed by the
8 commissioner or an agent designated by the commissioner which shall seek
9 technical assistance from affected insurers and the New York Automobile
10 Insurance Plan. This program shall utilize all information collected
11 pursuant to this section or pursuant to sections three hundred twelve-b
12 and three hundred twelve-c of this article and shall also include the
13 following elements:
14 (a) In addition to and in conjunction with either the provisions of
15 subdivision two of this section or the provisions of sections three
16 hundred twelve-b and three hundred twelve-c of this article, insurers
17 that write private passenger or commercial motor vehicle insurance in
18 this state shall also submit to the department, either electronically
19 [or], by paper copy or, if established pursuant to the provisions of
20 section three hundred twelve-b of this article, by online verification,
21 at the option of the department, information that identifies those poli-
22 cies that have been cancelled, terminated or non-renewed and all poli-
23 cies that have been issued, the date when such insurance lapses, and any
24 other information that the commissioner deems necessary to efficiently
25 identify and track uninsured vehicles in this state such as a
26 policyholder's address, policy number, vehicle registration number, and
27 vehicle identification number. The department may exempt from such
28 [pilot] program the transfer of information on certain classifications
29 of vehicles that are in the opinion of the department generally insured
30 and which it is difficult to identify uninsured vehicles within such
31 classification, such as large commercial vehicle fleets;
32 (b) [The] Except as otherwise provided in section three hundred
33 twelve-b of this article, the department shall forward to each motor
34 vehicle insurer, at such times as deemed necessary and appropriate by
35 the commissioner, a listing of all the registrants the department has on
36 file as insured with that insurer. Such insurer shall then review the
37 listing within thirty days of receipt of the listing and report to the
38 department which of the registrants the insurer does not insure;
39 (c) The commissioner shall, in conjunction with the superintendent of
40 state police and local law enforcement officials formulate a means to
41 allow such database established pursuant to this subdivision to be easi-
42 ly accessible to on-duty law enforcement personnel in the performance of
43 their official duties for the purpose of verifying whether an operator
44 maintains proper insurance coverage and to increase compliance with the
45 motor vehicle financial security laws under this article and article
46 eight of this title;
47 (d) In developing the mechanism to electronically transfer information
48 to the department pursuant to this section or, at the department's
49 option, pursuant to sections three hundred twelve-b and three hundred
50 twelve-c of this article, the commissioner shall consult with the super-
51 intendent of financial services and insurers to adopt a standardized
52 system of organizing, recording and transferring such information so as
53 to minimize insurer administrative expenses. The commissioner shall to
54 the maximum extent possible utilize nationally recognized electronic
55 data information systems such as those developed by the American
S. 9844 4
1 National Standards Institute or the American Association of Motor Vehi-
2 cle Administrators;
3 (e)(1) Either simultaneously or after the up-dated database system has
4 been established, the commissioner shall develop a computer indicator
5 that can be imprinted on a vehicle registration sticker or on a sticker
6 to be affixed to the insured's license plate. Such indicator system
7 shall enable law enforcement personnel and other authorized persons when
8 acting in the course of their official duties to access the department's
9 database so that such persons can ascertain whether a vehicle is proper-
10 ly insured or not insured;
11 (2) Such computer indicator system shall enable authorized persons in
12 the performance of their official duties to access information such as
13 the registrant's name, vehicle identification number, name of insurer,
14 current status of insurance, vehicle registration number and other
15 information that the commissioner deems necessary to implement the
16 provisions of this section or section three hundred twelve-b of this
17 article. The commissioner in developing such computer indicator system
18 shall enable authorized persons in the performance of their official
19 duties to access only such information that is necessary to detect unin-
20 sured motor vehicles or accomplish other goals clearly established and
21 authorized by law. Such computer indicator system shall be designed to
22 protect the personal privacy interests of motorists;
23 (f) The commissioner shall maintain [an] the insured vehicle database
24 system [that is accurate to within a period of fourteen days] estab-
25 lished pursuant to this subdivision and a computer indicator system
26 described in paragraph (e) of this subdivision [within twenty-four
27 months of the effective date of this subdivision and] that are accurate
28 to within seven days [by January first, two thousand one. The commis-
29 sioner shall submit to the legislature a report within eighteen months
30 from the date this subdivision takes effect which outlines the progress
31 being made to implement such database and computer indicator system.
32 After such database and computer indicator system is established and put
33 into operation, the commissioner shall make recommendations to the
34 legislature to alter, minimize or eliminate the need for the issuance of
35 insurance identification cards, simplify the requirements to demonstrate
36 proof of financial security and certificate of insurance currently
37 required by this article, eliminate the requirement for production of
38 proof of financial security to accompany applications for registrations
39 or renewals thereof provided that such database indicates that the
40 registrant is insured, and the repeal or modification of section three
41 hundred twelve-a of this article. The commissioner shall also make
42 recommendations to the legislature to streamline and shorten the notice
43 termination requirements of subdivisions one, two and three of this
44 section and section three hundred eighteen of this article. Such report
45 shall be submitted to the legislature within twelve months from the date
46 such database and indicator system has been implemented];
47 (g) [To minimize the cost of this program, the commissioner, if he
48 deems it necessary and prudent, can initially limit the scope of this
49 project to a select number of vehicle classifications or insurers;
50 (h)] Notwithstanding any other provision of law, information obtained
51 by the department pursuant to this section and sections three hundred
52 twelve-b and three hundred twelve-c of this article shall not be
53 disclosed, used, sold, accessed, utilized in any manner or released by
54 the department to any person, corporation, or state and local agency,
55 except in response to a specific, individual request for such informa-
56 tion authorized pursuant to the federal driver's privacy protection act
S. 9844 5
1 (18 U.S.C. 2721 et.seq.). The department shall institute measures to
2 ensure that only authorized persons are permitted to access such infor-
3 mation for the purposes specified by this section and section three
4 hundred twelve-b of this article. Persons who knowingly release or
5 disclose information from such database for a purpose other than those
6 described as authorized by this section or to a person not entitled to
7 receive it shall be guilty of a misdemeanor for each such release or
8 disclosure[; and
9 (i) The commissioner may postpone implementation of such pilot data-
10 base and computer indicator system for a period of time not to exceed
11 eighteen months if he or she determines that the program is not ready
12 for implementation. Should the commissioner determine that such system
13 cannot be implemented during the eighteen months extension, then the
14 commissioner shall report to the legislature the reasons why such
15 program cannot be implemented and request that the law be amended to
16 delay its implementation date].
17 § 2. The vehicle and traffic law is amended by adding a new section
18 312-b to read as follows:
19 § 312-b. Online insurance verification system of motor vehicle insur-
20 ance. 1. The commissioner may establish a system for the online verifi-
21 cation of motor vehicle owners' policies of liability insurance. Infor-
22 mation available in the online insurance verification system shall be
23 provided to the commissioner by motor vehicle insurers pursuant to rules
24 and regulations promulgated by the commissioner, if the commissioner
25 determines establishment of such system would further the purposes of
26 this article as set forth in subdivision two of section three hundred
27 ten of this article.
28 2. Where the commissioner establishes a system for the online verifi-
29 cation of owners' policies of liability insurance pursuant to this
30 section, the commissioner shall verify motor vehicle owners' policies of
31 liability insurance and maintain such system of online verification of
32 owners' policies of liability insurance that is accurate to within a
33 period of no less than seven days, and shall develop, implement, and
34 maintain security features to protect the security, confidentiality, and
35 integrity of such system's information and data and provide safeguards
36 necessary or appropriate to preclude unauthorized access to such infor-
37 mation and data.
38 3. The online insurance verification system shall, at a minimum, have
39 the ability:
40 (a) for the department to send requests to motor vehicle insurers for
41 verification of evidence of a motor vehicle owner's policy of liability
42 insurance as prescribed by this chapter via web services, through the
43 internet, or a similar proprietary or common carrier electronic system,
44 as well as to receive from motor vehicle insurers verification of
45 evidence of a motor vehicle owner's policy of liability insurance in a
46 form and manner as determined by the commissioner;
47 (b) to be utilized by the commissioner for verification of mandatory
48 motor vehicle liability insurance coverage as prescribed by this chap-
49 ter;
50 (c) to enable the commissioner to make inquiries to motor vehicle
51 insurers for evidence of motor vehicle owners' policies of liability
52 insurance including, but not limited to, policyholders' addresses, poli-
53 cy numbers, vehicle registration numbers, and vehicle identification
54 numbers;
S. 9844 6
1 (d) to respond to each request by the commissioner for motor vehicle
2 liability insurance information within an amount of time determined by
3 the commissioner; and
4 (e) to respond within the time established.
5 4. If the commissioner implements an online insurance verification
6 system pursuant to this section, such system (a) shall not be accessible
7 except to the commissioner and to insurers to the extent necessary to
8 comply with the provisions of this section and section three hundred
9 twelve-c of this article, and (b) shall undergo an appropriate testing
10 and pilot period of not less than one year after which, should the
11 commissioner determine to proceed with such online insurance verifica-
12 tion system, the commissioner shall certify in writing to the governor,
13 the temporary president of the senate, and the speaker of the assembly
14 that such system is fully operational.
15 § 3. The vehicle and traffic law is amended by adding a new section
16 312-c to read as follows:
17 § 312-c. Insurer responsibilities for the online insurance verifica-
18 tion system. Where an online insurance verification system is estab-
19 lished pursuant to section three hundred twelve-b of this article:
20 1. every motor vehicle insurer shall provide the commissioner with
21 access to its motor vehicle liability insurance policy status informa-
22 tion as provided by, and consistent with any time frames established by,
23 any rules and regulations promulgated by the commissioner; and
24 2. every insurer that is licensed to issue motor vehicle insurance
25 policies or is authorized to do business in this state shall comply with
26 this section and section three hundred twelve-b of this article for
27 verification of evidence of motor vehicle liability insurance for every
28 vehicle insured by that insurer in this state, as required by this chap-
29 ter and the rules and regulations promulgated by the commissioner there-
30 under.
31 § 4. Paragraph (d) of subdivision 3 of section 317 of the vehicle and
32 traffic law, as added by chapter 678 of the laws of 1997, is amended to
33 read as follows:
34 (d) To fully fund such [pilot] database system and bar code program
35 established pursuant to subdivision four of section three hundred thir-
36 teen of this article and, where established pursuant to section three
37 hundred twelve-b of this article, such online insurance verification
38 system, the commissioner shall utilize the following three sources of
39 revenue: (1) twenty-five percent of all civil penalties imposed upon
40 persons fined pursuant to paragraph (b) of subdivision one-a of section
41 three hundred eighteen of this article, (2) monies obtained from grants
42 that may be awarded to the commissioner from the motor vehicle theft and
43 insurance fraud prevention fund, and (3) pro rata assessments upon all
44 insurance carriers subject to the provisions of this section in propor-
45 tion to the premium estimates filed by such carriers.
46 § 5. This act shall take effect on the one hundred twentieth day after
47 it shall have become a law. Effective immediately, the addition, amend-
48 ment and/or repeal of any rule or regulation necessary for the implemen-
49 tation of this act are authorized to be made and completed on or before
50 such effective date.
