ASSEMBLY, No. 1819

STATE OF NEW JERSEY

INTRODUCED MARCH 28, 1996

By Assemblyman BAGGER

An Act concerning the release to and use of motor vehicle information by insurers and supplementing chapter 3 of Title 39 of the Revised Statutes.

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

    1. As used in this act:

    "Driver record information" means information maintained by the director with respect to licensed or previously licensed drivers, including, but not limited to: name; address; gender; date of birth; driver license number, type, issue date and expiration date; driver restrictions; and driving offenses including any record of penalty points maintained pursuant to section 2 of P.L.1982, c.43 (C.39:5-30.6) or any other violation of this Title.

    "Insurance information business" means an insurance support organization pursuant to subsection m. of section 2 of P.L.1985, c.179 (C.17:23A-2) or an organization which engages solely in the business of creating, maintaining, and purveying databases of information for use by insurers.

    "Insurer" means a stock or mutual corporation or a reciprocal insurance exchange licensed, authorized, or admitted to conduct the business of insurance in this State pursuant to the provisions of subtitle 3 of Title 17 of the Revised Statutes.

    "Motor vehicle registration data" means all of the information maintained by the director with respect to registered or previously registered motor vehicles, including, but not limited to: registered owner's name; address; date of birth; driver license number; vehicle make, model, year, type; and vehicle identification number.

    2. The director is authorized to enter into agreements with insurance information businesses, insurers and their agents to receive, transmit and store driver record information and motor vehicle registration data electronically, on terms and conditions established by the director, and for fees that the director deems fair, reasonable and sufficient to defray the actual costs of administering this act.

      Any organization or agent requesting information pursuant to this act shall be preapproved by the director after registering with the division and providing proof that it is a bonafide insurance information business, insurer or agent, and such other information as the director may deem appropriate.

    3. An insurer may only use information received pursuant to section 2 of this act to:

    a. Verify the accuracy of information provided to the insurer by applicants for motor vehicle insurance, persons covered or proposed to be covered under an automobile insurance policy issued by the insurer, or claimants under any such policy;

    b. Determine whether or not to accept or continue a policy or risk;

    c. Determine the proper rate for a policy or risk;

    d. Determine whether to accept, deny or otherwise adjust a claim;

    e. Determine whether or not to notify the Division of Insurance Fraud Prevention of a possible violation of the "New Jersey Insurance Fraud Prevention Act," P.L.1983, c.320 (C.17:33A-1 et seq.); or

    f. For such other similar or related purposes deemed reasonable and appropriate by the director, after consulting with the Commissioner of the Department of Insurance, and specified in an agreement made pursuant to section 2 of this act.

    4. In addition or as an alternative to any other penalty, the director may impose a fine of up to $5,000 for the first violation of section 3 of this act, and not exceeding $10,000 for each subsequent violation.

    5. This act shall take effect on the first day of the fifth month after enactment.

STATEMENT

    This bill authorizes the Director of the Division of Motor Vehicles (DMV) to enter into agreements with insurance information businesses, insurers and their agents for the provision of driver record and motor vehicle registration information for automobile insurance purposes. It would permit insurers to use this information only for certain specified purposes, including underwriting and rating risks, evaluating claims, determining whether to file fraud reports with the Department of Insurance, and related purposes if approved by the director. Fines of up to $5,000 and $10,000 are imposed for unauthorized use of this information for the first and subsequent violations, respectively. The bill authorizes this information to be made available electronically and permits DMV to charge a fee for this information sufficient to cover the cost of providing it.

Makes certain DMV information available to auto insurers.