By Senator Orr
ENROLLED, An Act,
To amend Sections 32-7-19, 32-7-20, 32-7-22, 32-7-24, 32-7A-2, 32-7A-3, 32-7A-4, 32-7A-5, 32-7A-6, 32-7A-7, and 32-7A-8, Code of Alabama 1975, relating to the verification of a motor vehicle liability policy as evidence of financial responsibility through the online insurance verification system on motor vehicles insured under personal insurance coverage and to establish an online insurance verification system on motor vehicles insured under personal insurance coverage; to repeal Sections 32-7A-9 to 32-7A-22, Code of Alabama 1975; to add Sections 32-7A-9 to 32-7A-25 to the Code of Alabama 1975; relating to mandatory motor vehicle liability insurance or other methods of financial responsibility allowed by law, to require the verification of motor vehicle liability insurance or other methods of financial responsibility allowed by law prior to motor vehicle registration and re-registration, and to allow the Department of Revenue and law enforcement to electronically verify motor vehicle liability insurance or other methods of financial responsibility allowed by law with an online insurance verification system; and to add Sections 32-7B-1, 32-7B-2, 32-7B-3, 32-7B-4, 32-7B-5, and 32-7B-6 to the Code of Alabama 1975, relating to the establishment of an online insurance verification system on motor vehicles insured under personal insurance coverage.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Sections 32-7-19, 32-7-20, 32-7-22, and 32-7-24, Code of Alabama 1975, are amended to read as follows:§32-7-19.
"(a) Proof of financial responsibility when required under this chapter with respect to a motor vehicle or with respect to a person who is not the owner of a motor vehicle may be given by filing:
"(1) A certificate of insurance as provided in Section 32-7-20 or Section 32-7-21; or
"(2) A bond as provided in Section 32-7-26; or
"(3) A certificate of deposit of money or securities as provided in Section 32-7-27; or
"(4) A certificate of self-insurance, as provided in Section 32-7-34, supplemented by an agreement by the self-insurer that, with respect to accidents occurring while the certificate is in force, he or she will pay the same judgments and in the same amounts that an insurer would have been obligated to pay under an owner's motor vehicle liability policy if it had issued such a policy to the self-insurer.
"(b) Proof of financial responsibility relating to a motor vehicle liability policy when required under this chapter with respect to a motor vehicle or with respect to a person who is not the owner of a motor vehicle may be verified through the online insurance verification system of Chapter 7B of Title 32 and Chapter 7A of Title 32.
"(c) No motor vehicle shall be or continue to be registered in the name of any person required to file proof of financial responsibility unless such proof shall be furnished for such motor vehicle.
§32-7-20.
"(a) Proof of financial responsibility may be furnished by filing with the director the written certificate of any insurance carrier duly authorized to do business in this state certifying that there is in effect a motor vehicle liability policy for the benefit of the person required to furnish proof of financial responsibility. Such certificate shall give the effective date of such motor vehicle liability policy, which date shall be the same as the effective date of the certificate, and shall designate by explicit description or by appropriate reference all motor vehicles covered thereby, unless the policy is issued to a person who is not the owner of a motor vehicle.
"(b) Proof of financial responsibility relating to a motor vehicle liability policy may be verified through the online insurance verification system of Chapter 7B of Title 32 and Chapter 7A of Title 32.
"(c) No motor vehicle shall be or continue to be registered in the name of any person required to file proof of financial responsibility unless such motor vehicle is so designated in such a certificate.
§32-7-22.
"(a) A motor vehicle liability policy, as the term is used in this chapter, means an owner's or an operator's policy of liability insurance, certified as provided in Section 32-7-20 or Section 32-7-21 as proof of financial responsibility, and issued, except as otherwise provided in Section 32-7-21, by an insurance carrier duly authorized to transact business in this state, to or for the benefit of the person named in the policy as insured.
"(b) The owner's policy of liability insurance:
"(1) Shall designate by explicit description or by appropriate reference all motor vehicles to be insured; and
"(2) Shall insure the person named in the policy and any other person, as insured, using any motor vehicle or motor vehicles designated in the policy with the express or implied permission of the named insured, against loss from the liability imposed by law for damages arising out of the ownership, maintenance, or use of such motor vehicle or motor vehicles within the United States of America or the Dominion of Canada, subject to limits exclusive of interest and costs, with respect to each such motor vehicle, in the amount of not less than the minimum amounts set for bodily injury or death and for destruction of property under subsection (c) of Section 32-7-6.
"(c) The operator's policy of liability insurance shall insure the person named as insured in the policy against loss from the liability imposed upon him or her by law for damages arising out of the use by him or her of any motor vehicle not owned by him or her, within the same territorial limits and subject to the same limits of liability as are set forth above with respect to an owner's policy of liability insurance.
"(d) The motor vehicle liability policy shall state the name and address of the named insured, the coverage afforded by the policy, the premium charged for the policy, the policy period, and the limits of liability and shall contain an agreement or be endorsed that insurance is provided under the policy in accordance with the coverage defined in this chapter for bodily injury and death or property damage, or both, and is subject to all the provisions of this chapter.
"(e) The motor vehicle liability policy need not insure any liability under any workers' compensation law nor any liability on account of bodily injury to or death of an employee of the insured while engaged in the employment, other than domestic, of the insured, or while engaged in the operation, maintenance, or repair of any motor vehicle nor any liability for damage to property owned by, rented to, in charge of or transported by the insured.
"(f) Every motor vehicle liability policy shall be subject to the following provisions which need not be contained in the policy:
"(1) The liability of the insurance carrier with respect to the insurance required by this chapter shall become absolute whenever injury or damage covered by the motor vehicle liability policy occurs. The policy may not be cancelled or annulled as to that liability by any agreement between the insurance carrier and the insured after the occurrence of the injury or damage. Any statement made by the insured or on his or her behalf and any violation of the policy shall not defeat or void the policy.
"(2) The satisfaction by the insured of a judgment for injury or damage shall not be a condition precedent to the right or duty of the insurance carrier to make payment on account of injury or damage.
"(3) The insurance carrier shall have the right to settle any claim covered by the policy, and if the settlement is made in good faith, the amount of the settlement shall be deductible from the limits of liability specified in subdivision (2) of subsection (b) of this section.
"(4) The policy, the written application for the policy, if any, and any rider or endorsement which does not conflict with this chapter shall constitute the entire contract between the parties.
"(g) Any policy which grants the coverage required for a motor vehicle liability policy may also grant any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy, and the excess or additional coverage shall not be subject to this chapter. With respect to a policy which grants any excess or additional coverage, the term "motor vehicle liability policy" shall apply only to that part of the coverage which is required by this section.
"(h) Any motor vehicle liability policy may provide that the insured shall reimburse the insurance carrier for any payment the insurance carrier would not have been obligated to make under the terms of the policy except for this chapter.
"(i) Any motor vehicle liability policy may provide for the prorating of the insurance by its terms with other valid and collectible insurance.
"(j) The requirements for a motor vehicle liability policy may be fulfilled by the policies of one or more insurance carriers which policies together meet the requirements for a policy.
"(k) Any binder issued pending the issuance of a motor vehicle liability policy shall be deemed to fulfill the requirements for a policy.
§32-7-24.
"(a) When an insurance carrier has certified a motor vehicle liability policy under Section 32-7-20 or a policy under Section 32-7-21, the insurance so certified shall not be cancelled or terminated until at least 10 days after a notice of cancellation or termination of the insurance so certified shall be filed in the office of the director; except, that such a policy subsequently procured and certified shall, on the effective date of its certification, terminate the insurance previously certified with respect to any motor vehicle designated in both certificates.
"(b) When the director has verified evidence of a motor vehicle liability policy using the online insurance verification system under subsection (b) of Section 32-7-20, the director shall continue to verify evidence of a motor vehicle liability policy using the online insurance verification system under subsection (b) of Section 32-7-20 for the applicable period.
Section 2. Sections 32-7A-2 to 32-7A-8, Code of Alabama 1975, are amended to read as follows:§32-7A-2.
"For the purposes of this chapter, the following terms shall have the following meanings respectively ascribed to them in this section, except in those instances where the context clearly indicates a different meaning:
"(1) CERTIFICATE OF INSURANCE. A document issued by an insurer or its authorized representative showing that a specific vehicle is insured for no less than the minimum limits of liability coverage for bodily injury or death and for destruction of property under subsection (c) of Section 32-7-6.
"(2) COMMERCIAL AUTOMOBILE LIABILITY INSURANCE POLICY. An insurance policy that:
"a. Is written on either a commercial coverage or other commercially rated personal policy form, including, but not limited to, a commercial auto, garage, or truckers form, and is not dependent on the type, number, or ownership of vehicle or entity covered or insured.
"b. Insures vehicles that are not identified individually by vehicle identification number on the policy.
"(3) COMMISSIONER. The Commissioner of the Department of Revenue or his or her designee.
"(4) DEALER. Any person dealing in, buying, selling, exchanging, advertising, or negotiating the sale of motor vehicles and licensed under the provisions of Section 40-12-391.
"(5) DECLARATIONS PAGE. That part of an insurance policy showing the name of the insured, insuring company, the vehicle make, the year model, the vehicle identification number (VIN), the policy number, the amount of coverage or coverages, and the effective and expiration dates of the policy.
"(6) DEPARTMENT. The Department of Revenue.
"(7) DEPOSIT OF CASH. Funds deposited with and held by the State Treasurer as security for payment by the depositor, or by any person responsible for the depositor's motor vehicle with his or her express or implied consent, of all judgments rendered against the depositor or other authorized operator of the depositor's motor vehicle arising from injury, death, or damage sustained through use, operation, maintenance, or control of the motor vehicle within the State of Alabama.
"(8) DIRECTOR. The Director of Public Safety of the State of Alabama, or his or her designee.
"(9) INSURANCE BINDER. A document issued by an insurer or its authorized representative showing that a specific vehicle is insured for no less than the minimum limits of liability coverage for bodily injury or death and for destruction of property under subsection (c) of Section 32-7-6.
"(10) INSURANCE COMMISSIONER. The Commissioner of the Department of Insurance, or his or her designee.
"(11) LIABILITY INSURANCE POLICY. An owner's or an operator's personal automobile liability insurance policy, issued by an insurance carrier duly authorized to transact business in this state.
"(12) MOTOR VEHICLE. Every self-propelled vehicle that is designed to be operated on the streets and highways of Alabama, but not operated upon rails.
"(13) MOTOR VEHICLE LIABILITY BOND. A bond of a surety company duly authorized to transact business in this state, which is conditioned for payments in amounts and under the same circumstances as would be required in a motor vehicle liability insurance policy.
"(14) NAIC NUMBER. This is a unique identification number assigned to the insurance company by the National Association of Insurance Commissioners.
"(15) NON-ADMITTED COMPANY. An insurance company not licensed to conduct business in this state which sells coverage that is unavailable from licensed insurers within this state.
"(16) NON-OWNER POLICY. An insurance policy issued for persons who drive but do not own the insured vehicle.
"(17) ONLINE INSURANCE VERIFICATION SYSTEM. An online insurance verification system using web services as defined in Section 32-7B-2(6).
"(18) OPERATOR. Every person who is in actual physical control of a motor vehicle.
"(19) OWNER. Any of the following persons:
"a. A person or persons holding the legal title to a motor vehicle, unless paragraph b. or c. is applicable.
"b. The mortgagor, debtor, conditional vendee, or lessee of a vehicle that is the subject of a chattel mortgage, lien, agreement for the conditional sale thereof, lease or other like agreement with the right of purchase upon performance of the conditions stated in the agreement and with the immediate right of possession vested in the mortgagor, debtor, conditional vendee, or lessee, in which event the mortgagor, debtor, conditional vendee, or lessee shall be deemed the owner for purposes of this chapter.
"c. The lessee of a vehicle owned by the United States of America or any of its agencies or instrumentalities.
"(20) PERSON. Every natural person, firm, partnership, association, estate, trust, corporation, limited liability partnership, limited liability company, or other entity.
"(21) REGISTRANT. Vehicle owner or operator, who is issued a registration for a motor vehicle.
"(22) REGISTRATION. Certificate or certificates and license plates issued under the laws of this state pertaining to the registration of motor vehicles.
"(23) SIGNATURE. A unique mark, process, or verification in a manner prescribed by the department, as provided in Section 40-1-1.
"(24) STATE. Any state, territory or possession of the United States, the District of Columbia, any province or territory of the Dominion of Canada, or a state of the Republic of Mexico.
"(25) SUSPENSION. The withdrawal by formal action of the department of a vehicle's registration as specified by this chapter.
"The terms "liability insurance policy," "deposit of cash," and a "motor vehicle liability bond" are used interchangeably throughout this chapter.
§32-7A-3.
"(a) The department shall administer and enforce the provisions of this chapter and shall make such reasonable rules and regulations concerning any matter administered in this chapter and shall provide for hearings upon the request of persons aggrieved by orders or acts of the department under the provisions of this chapter.
"(b) The department may prescribe and provide suitable notices and forms necessary to carry out the provisions of this chapter.
"(c) The department :
"(1) May make necessary investigations to procure information required to carry out the provisions of this chapter.
"(2) Shall suspend the motor vehicle registrations pursuant to the provisions of this chapter.
"(3) Shall require insurance companies doing business in this state to regularly report the vehicle identification numbers covered by their mandatory liability insurance policies in a manner specified by the department.
"(4) May operate a pilot program to study the extent of the uninsured motorist problem in this state, to make operational changes that it sees necessary in order to reduce the number of uninsured motorists, and to manage the registration selection, suspension, and reinstatement processes in the most productive manner possible. Funding for the pilot program, including performance-based or fixed fees, or both, shall be derived from registration reinstatement fees.
"(5) May enter into a personal services contract with a consulting firm having personnel with extensive operational and management experience in the development, deployment, and operation of insurance verification programs. This firm shall assist in operating a pilot program by analyzing and using available data to share nationally-recognized best practices for operating insurance verification programs, to study existing and planned practices and implement recommendations for improvement, and to have responsibility for reducing uninsured motorist rates in this state.
"(d) At any time within 30 calendar days after the rendition of any suspension, or decision under the provisions of this chapter, any person may appeal to the administrative law judge pursuant to Section 40-2A-8. After exhausting his or her appeal rights provided under Section 40-2A-8, and, upon providing evidence of payment of the reinstatement fee provided in this chapter, the person may appeal to the circuit court. The appeals to the administrative law judge or circuit court shall be as provided in Section 40-2A-9.
§32-7A-4.
"(a) No person shall operate, register, or maintain registration of, and no owner shall permit another person to operate, register, or maintain registration of, a motor vehicle designed to be used on a public highway unless the motor vehicle is covered by a liability insurance policy, a commercial automobile liability insurance policy, motor vehicle liability bond, or deposit of cash.
"(b)(1) The liability insurance policy or commercial automobile liability insurance policy shall be issued in amounts no less than the minimum amounts set for bodily injury or death and for destruction of property under Section 32-7-6(c).
"(2) The motor vehicle liability bond shall be in the amount of not less than the minimum amounts of liability coverage for bodily injury or death and for destruction of property under subsection (c) of Section 32-7-6. The bond shall be conditioned on the payment of the amount of any judgment rendered against the principal in the bond or any person responsible for the operation of the principal's motor vehicle with his or her express or implied consent, arising from injury, death, or damage sustained through the use, operation, maintenance, or control of the motor vehicle within the State of Alabama.
"(3) The deposit of cash with the State Treasurer shall be in the amount of not less than the minimum amounts set for bodily injury or death and for destruction of property under subsection (c) of Section 32-7-6.
"(c) Only an insurer authorized to do business in this state shall issue a policy pursuant to this section for any vehicle subject to registration under Chapter 12 of Title 40. Nothing herein shall deprive an insurer of any policy defense available at common law.
"(d) Notwithstanding the provisions in subsection (c), any insurance policies issued by non-admitted insurance companies procured through Alabama licensed surplus lines insurance brokers, pursuant to the provisions of Section 27-10-20 for the amounts prescribed under subsection (c) of Section 32-7-6, shall be deemed to be in compliance with this chapter provided the brokers are licensed with the Department of Insurance and the brokers transfer all required insurance information in the manner and frequency as prescribed by the department.
§32-7A-5.
"This chapter shall not apply to any of the following vehicles or operators:
"(1) Trailers as defined in Section 40-12-240, including, but not limited to, semitrailers, travel trailers, boat trailers, pole trailers, and utility trailers.
"(2) Motor vehicles owned and operated by the United States or any agency thereof, the State of Alabama, or any political or governmental subdivision thereof.
"(3) Any motor vehicle which is subject to the supervision and regulation of the Federal Motor Carrier Safety Administration or the Alabama Public Service Commission and for which the owner and/or operator has filed evidence of financial responsibility, the liability under which is not less than that required of the operator of a motor vehicle under the terms of this chapter.
"(4) Motor vehicles covered by a certificate of self-insurance issued by the director under the provisions of Section 32-7-34.
"(5) Other motor vehicles complying with laws which require the vehicles to be insured in amounts meeting or exceeding the minimum amounts required under Section 32-7-6(c).
"(6) Implements of husbandry as defined in Section 32-8-2(5).
"(7) Any vehicle moved solely by animal power.
"(8) Special mobile equipment, as defined in Section 32-8-2(20).
"(9) Inoperable or stored motor vehicles that are not operated, as defined by rules and regulations of the department and not subject to the provisions of Section 32-7A-7.
"(10) Motor vehicles owned by a licensed motor vehicle dealer, wholesaler, rebuilder, or reconditioner and held in inventory that are covered by a blanket liability insurance policy or commercial automobile liability insurance policy.
"(11) Vehicles properly registered in another jurisdiction and not legally required to be registered pursuant to Chapter 12 of Title 40.
"(12) Vehicles owned by a bank, a subsidiary or affiliate of a bank, or finance company, acquired as an incident to their regular business, that are covered by a blanket liability insurance policy or commercial automobile liability insurance policy.
"(13) Vehicles as prescribed by the commissioner that are covered by a blanket liability insurance policy or commercial automobile liability insurance policy.
§32-7A-6.
"(a) Every operator of a motor vehicle subject to the provisions of Section 32-7A-4 shall carry within the vehicle evidence of insurance. The evidence shall be legible and sufficient to demonstrate that the motor vehicle currently is covered by a liability insurance policy or a commercial automobile liability insurance policy as required under Section 32-7A-4 and may include, but is not limited to, the following:
"(1) An insurance card, or temporary insurance card, provided by the insurer or an authorized representative under this section.
"(2) The combination of proof of purchase of the motor vehicle within the previous 20 calendar days and a current and valid insurance card issued for the motor vehicle replaced by such purchase.
"(3) The current declarations page of a liability insurance policy.
"(4) A liability insurance binder, or legible copy thereof, certificate of liability insurance, or legible copy thereof; provided such document contains all information required in this chapter.
"(5) A current motor vehicle rental agreement for the vehicle, which specifies insurance coverage by the rental company or the operator in the minimum amounts, provided in Section 32-7-6(c).
"(b) The insurer issuing the liability insurance policy or the commercial automobile liability insurance policy shall provide an insurance card for each motor vehicle insured that shall contain the following information:
"(1) The vehicle year model.
"(2) The vehicle make.
"(3) The vehicle identification number (VIN).
"(4) The name of the insured(s).
"(5) The name of the insurance company.
"(6) The policy number, not required on temporary insurance card.
"(7) The effective date and expiration date, which shall cover a period of time not to exceed 12 months.
"(8) Insurance company's NAIC number.
"(c) Notwithstanding the foregoing, if the insurance card is issued for a commercial automobile liability insurance policy, the card may state "FLEET," "COMMERCIAL," "COMMERCIAL POLICY," or "COMMERCIAL EXEMPT" in lieu of vehicle years, makes, and VIN's if vehicle years, makes, and VIN's are not captured by the insurer. If the vehicle years, makes, and VIN's are captured by the insurer, then the insurer may provide such information on the insurance card, but must state "FLEET," "COMMERCIAL," "COMMERCIAL POLICY," or "COMMERCIAL EXEMPT" on the insurance card. If the insurance card is issued for a nonowner policy, the card may state "NONOWNER POLICY" in lieu of the vehicle year, make, and VIN.
"(d) The minimum size of the insurance card shall be 3" by 2 1/8". All required information shall be printed on the front of the card. The insurance card may include other information at the discretion of the insurer. Insurance companies may allow authorized representatives to issue temporary insurance cards to satisfy the requirements of this chapter. Temporary insurance cards are not required to have the policy number but shall contain all other required information.
"(e) No insurer shall issue a card, similar in appearance, form, and content to the insurance card required under this section, in connection with an insurance policy that does not provide the liability insurance coverage required under Section 32-7A-4.
"(f) Insurance binders, certificates of liability insurance, and other evidence of insurance as required under this section, must meet the following requirements (except where noted):
"(1) Insurance company name.
"(2) Policy number - not required on a binder or temporary insurance card.
"(3) Effective date.
"(4) Expiration date.
"(5) Name of insured(s).
"(6) Vehicle year model - not required if issued for a commercial automobile liability insurance policy or for a nonowner policy.
"(7) Vehicle make - not required if issued for a commercial automobile liability insurance policy or for a nonowner policy.
"(8) Vehicle identification number - not required if issued for a commercial automobile liability insurance policy or for a nonowner policy.
"(9) Signature of authorized representative.
"(g) The combination proof of purchase of a motor vehicle, as provided in subsection (a) above, shall consist of a legible copy of the legal bill of sale if the motor vehicle is not subject to the provisions of the Alabama Uniform Certificate of Title and Antitheft Act, or the owner's copy of the application for certificate of title for a motor vehicle subject to the provisions of the Alabama Uniform Certificate of Title and Antitheft Act, or an Alabama certificate of title issued in the name of the vehicle owner or operator.
"(h) The evidence of insurance shall be presented upon request made by any law enforcement officer wearing a uniform or presenting a badge, or both or other sign of authority. Any person who fails or refuses to comply with such request is in violation of Section 32-7A-16 unless evidence of motor vehicle liability insurance or other evidence of financial responsibility as provided in this chapter is verified through the online insurance verification system. Any person who presents evidence of insurance, knowing there is no valid liability insurance in effect on the motor vehicle as required under Section 32-7A-4 or knowing the evidence of insurance is illegally altered, counterfeit, or otherwise invalid, is in violation of Section 32-7A-16.
§32-7A-7.
"(a) The department may review registrations of motor vehicles subject to Section 32-7A-4, or owners thereof, for the purpose of verifying whether or not the motor vehicles are insured through an online insurance verification system. If the department cannot verify the insurance status of a vehicle using the online insurance verification system or other such method for deposits of cash or motor vehicle insurance liability bonds, the department may send owners requests for information about their motor vehicles and liability insurance in accordance with subsections (d) and (e).
"(b) In addition to such review of motor vehicle registrations in subsection (a), the department may select and review for verification other sources of information including, but not limited to, registrations of motor vehicles owned by persons:
"(1) Whose motor vehicle registrations have been suspended pursuant to Section 32-7A-12 or any other provision of this chapter.
"(2) Who have been convicted of violating Section 32-7A-16 while operating vehicles owned by other persons.
"(3) Whose driving privileges have been suspended or revoked.
"(4) Who have received a disposition of supervision by the courts of this state for a violation of the provisions of this chapter.
"(c) The director shall provide to the department, in a manner designated by the department, the name of an owner or operator of any motor vehicle involved in an accident without liability insurance who is determined not to be subject to the suspension by the director pursuant to the provisions of Section 32-7-6. The director shall also provide to the department, in a manner designated by the department, the name of an owner or operator of any motor vehicle that has been found in violation of Section 32-7A-16.
"The department may then verify whether or not at the time of the accident such motor vehicle was covered by a liability insurance policy or commercial automobile liability insurance policy in accordance with Section 32-7A-4.
"(d) The department may send to owners of selected motor vehicles or to selected motor vehicle owners, requests for information about their motor vehicles and liability insurance coverage. The request shall require the owner to provide:
"(1) Whether or not the motor vehicle was insured on the verification date stated in the department's request, and the reason no insurance existed for the vehicle if not insured.
"(2) The name, address, NAIC number, and telephone number of the insurance company that insures the motor vehicle.
"(3) The effective date of the policy and the expiration date of the policy.
"(4) The owner's signature.
"(5) The policy number.
"(e) Within 30 calendar days after the department mails a request, the owner to whom it is sent shall furnish the requested information to the department in a manner as prescribed by the department. Evidence of insurance in effect on the verification date, as prescribed by the department, may be considered by the department to be a satisfactory response to the request for information.
"(f) Any owner whose response indicates that his or her vehicle did not have liability insurance coverage on the insurance verification date in accordance with Section 32-7A-4 shall be deemed to have registered or maintained registration of a motor vehicle in violation of that section. Any owner who fails to respond to such a request shall be deemed to have registered or maintained registration of a motor vehicle in violation of Section 32-7A-4.
"(g) If the owner responds to the request for information by asserting that his or her vehicle did have liability insurance coverage in accordance with Section 32-7A-4 on the verification date stated in the department's request, the department may conduct a verification of the response by furnishing necessary information to the insurer named in the response. The insurer shall within 30 calendar days inform the department if on the verification date stated the motor vehicle was not insured by the insurer in accordance with Section 32-7A-4 or the department may verify the response by using the online insurance verification system.
"(h) No review of registration selected under this section shall be categorized on the basis of race, color, religion, sex, national origin, ancestry, age, marital status, physical or mental disability, economic status, or geography.
§32-7A-8.
"If the department determines that an owner has registered or maintained the registration of a motor vehicle without a liability insurance policy or a commercial automobile liability insurance policy in accordance with Section 32-7A-4, the department shall notify the owner that such owner's vehicle registration shall be suspended 30 calendar days after the date of the mailing of the notice unless the owner furnishes evidence of insurance in effect on the verification date, as prescribed by the department. The notice shall be in writing and shall be mailed by the U.S. Postal Service, to the registrant's last known address as reflected on the department's motor vehicle registration records."
Section 3. Sections 32-7A-9, 32-7A-10, 32-7A-11, 32-7A-12, 32-7A-13, 32-7A-14, 32-7A-15, 32-7A-16, 32-7A-17, 32-7A-18, 32-7A-19, 32-7A-20, 32-7A-21, and 32-7A-22, Code of Alabama 1975, are repealed and reenacted to read as follows:
§32-7A-9.
An insurer shall allow access through an online insurance verification system to verify insurance status in accordance with Section 32-7A-7.
§32-7A-10.
(a) If any insurance company shall fail to consistently allow access through an online insurance verification system to verify coverage of motor vehicle liability insurance coverage, the department shall notify the Insurance Commissioner of any and all violations by an insurer of Sections 32-7A-9 and 32-7B-5.
(b) The department shall prescribe the form and manner of transmission for the purposes of notifying the Insurance Commissioner under subsection (a).
(c) The Insurance Commissioner may impose a fine of up to five thousand dollars ($5,000) per violation following a hearing, if, after receiving a notice of a potential violation of any material provision of Section 32-7A-9 or 32-7B-5 from the Insurance Commissioner, it is found that an insurer willfully violated a section listed in the notice.
§32-7A-11.
(a) When the department is unable to verify that liability insurance coverage exists for a motor vehicle registered or required to be registered in this state, the department shall send the registrant notice via USPS mail at the last known address as reflected on the department's motor vehicle registration records. The notice shall require that the registrant, within 30 calendar days of the date of the notice, provide evidence of continuous liability insurance coverage for the vehicle for the period specified by the department. The registration will be suspended unless either:
(1) The registrant responds within the required time frame and the response establishes that the registrant has not had a lapse in liability insurance coverage. The department shall then indicate in its records that the insured is in compliance with this chapter.
(2) The registrant responds within the required time frame that, after the registration date, he or she did not operate the vehicle during the lapse in coverage due to the motor vehicle being stored, inoperable, or otherwise unused as prescribed by the department. The current registration shall then be revoked and the department shall update its records to reflect that the registration is revoked for the remainder of the registration period. In the event the motor vehicle for which the registration has been revoked is no longer stored, inoperable, or otherwise unused as prescribed by the department, a new registration and license plate must be obtained prior to operating the vehicle.
(b) If the registrant subsequently provides, in a manner as prescribed by the department, proof of subsequent liability insurance coverage for the vehicle during the current registration period then the registration shall be reinstated.
(c) Any operator of a motor vehicle for which the registration has been revoked shall be subject to citation by law enforcement in accordance with Section 32-7A-16.
§32-7A-12.
(a) The department shall suspend the vehicle registration of any motor vehicle determined to be in violation of Section 32-7A-4, including any motor vehicle operated in violation of Section 32-7A-16 by an operator other than the owner of the vehicle. Neither the fact that, subsequent to the date of verification or violation, the owner acquired the required liability insurance policy nor the fact that the owner terminated ownership of the motor vehicle shall have any bearing upon the required suspension.
(b) The registration of any motor vehicle registered in this state shall be suspended upon the department receiving notice of the conviction of the operator of the motor vehicle in another state of an offense which, if committed in this state, would constitute a violation of Section 32-7A-4. Until it is terminated, any suspension under this chapter shall remain in force even if the registration is renewed or a new registration is acquired for the motor vehicle contrary to Section 32-7A-17.
(c) In the case of a first violation, the department shall terminate the suspension upon payment by the owner of a reinstatement fee of two hundred dollars ($200) in a manner as prescribed by the department and submission of proof of current insurance as prescribed by the department to either the department, the vehicle owner's county license plate issuing official, the circuit clerk of any county, or the Administrative Office of Courts. Upon a first violation, the owner's name and identifying information shall be provided to the director by the department, for the purpose of requiring the owner to purchase and maintain insurance pursuant to Section 32-7-13 or Section 32-7-31, or both, for a period of one year.
(d) In the case of a second or subsequent violation by a person having ownership interest in a motor vehicle or vehicles within the preceding four years, or a violation of Section 32-7A-16(b)(2), the department shall terminate the suspension four months after its effective date upon payment by the owner of a reinstatement fee of four hundred dollars ($400) in a manner as prescribed by the department and submission of proof of current insurance as prescribed by the department to either the department or to the vehicle owner's county license plate issuing official, the circuit clerk of any county, or the Administrative Office of Courts. In the case of a second or subsequent violation, the owner's name and identifying information shall be provided to the director by the department, for the purpose of the director requiring the owner to purchase and maintain insurance pursuant to Section 32-7-13 or Section 32-7-31, or both, for a period of three years. Upon conviction of a second offense the violator shall be guilty of a Class B misdemeanor.
(e) In accepting the reinstatement fee and proof of current insurance, the owner's county license plate issuing official, the circuit clerk of any county, or the Administrative Office of Courts shall be responsible for notifying and forwarding, not later than the next business day, any required documentation concerning the reinstatement of motor vehicle registration or registrations to the department in the manner prescribed by the department.
(f) Except as provided in subsections (g) and (i), a portion of the fees received under this section by the department shall be used by the department exclusively for the operation and management of the mandatory liability insurance law and this article. After the payment of the expenses, the remaining funds shall be deposited into the General Fund; provided, if the fees are collected by the owner's county license plate issuing official, the official shall remit the fee to the department, except for 10 percent of the fee, which shall be retained by the official and distributed 50 percent to the county license plate issuing official and 50 percent to the county general fund. The retained fees distributed to the county license plate issuing official shall be deposited into a special fund designated as the "Special Licensing Officials' Fund." The special fund shall be used for the improvement of the equipment and operations in the office of the licensing official charged with motor vehicle registration and titling responsibilities and shall be in addition to the amount budgeted for the office of the official. Fees deposited into the special fund shall be disbursed at the sole discretion of the license plate issuing official and shall be audited by the Examiners of Public Accounts. Such moneys in the special fund shall not accumulate in excess of ten thousand dollars ($10,000) during any fiscal year. Any excess moneys shall accrue to the county general fund. License plate issuing officials shall remit the balance of the funds to the department in the manner prescribed by the department by the 10th day of the month following the month of collection.
(g) If the reinstatement fees are collected by the Administrative Office of Courts, it shall remit the fee to the department, except for 15 percent of the fee, which shall be retained in its entirety by the Administrative Office of Courts. If the reinstatement fees are collected by the circuit clerk, it shall remit the fee to the department, except for 15 percent of the fee, which shall be retained by the circuit clerk and distributed evenly between the circuit clerk's office and the Administrative Office of Courts. Any portion of the reinstatement fee due to the Administrative Office of Courts shall be deposited into the Advanced Technology and Data Exchange Fund established pursuant to Section 12-19-290. Any portion of the reinstatement fee due to the circuit clerk shall be deposited into the Clerk's Fund established pursuant to Section 12-17-225.4(2).
(h) Refunds of reinstatement fees, less the retained fees, shall be granted in cases of duplicate payment, or as approved by the department. Anyone who is denied a refund of the reinstatement fee may appeal the denial to the administrative law judge pursuant to Section 40-2A-7.
(i) Notwithstanding the provisions of subsection (f), 15 percent of the net proceeds received by the department shall be deposited by the department into the Alabama Peace Officers' Annuity and Benefit Fund, as authorized by Section 36-21-66.
(j) It shall be unlawful for the vehicle owner's county license plate issuing official to fail to collect such reinstatement fees, when due. Additionally, the reinstatement fee shall not be waived by the court when the vehicle owner cannot produce evidence that a valid liability insurance policy was in effect on the date a citation was issued for violation of the provisions of this chapter.
(k) The terms "circuit clerk" and "circuit clerk's office" as used in any part of this act shall also include any district clerk or district clerk's office that functions separately from the office of the circuit clerk pursuant to Section 12-17-161, Code of Alabama 1975.
§32-7A-13.
All officials authorized by law to register motor vehicles, issue motor vehicle license plates, and to perform other duties in connection with the issuance of motor vehicle license plates shall refuse to register or re-register a motor vehicle or refuse to transfer the license plates if the registration is suspended pursuant to Section 32-7A-12.
§32-7A-14.
A person who, whether present or absent, aids, abets, induces, procures, or causes the commission of an act which, if done directly by him or her, would be a felony or a misdemeanor under a provision of this chapter, is guilty of the same felony or misdemeanor.
§32-7A-15.
A person is guilty of a Class C felony who, with fraudulent intent:
(1) Alters, forges, or counterfeits an insurance card to make it appear valid.
(2) Makes, sells, or otherwise makes available an invalid or counterfeit insurance card, or other evidence of insurance.
§32-7A-16.
(a) A person is guilty of a Class C misdemeanor who:
(1) Operates a motor vehicle without a liability insurance policy, a commercial automobile liability insurance policy, a motor vehicle liability insurance bond, or deposit of cash in accordance with this chapter.
(2) With notice of cancellation, recision, abrogation, or termination of insurance, registers, or attempts to register a motor vehicle.
(b) A person shall be guilty of a traffic violation who:
(1) Operates a motor vehicle and upon demand of a law enforcement officer, fails or refuses to present satisfactory evidence of insurance unless a law enforcement officer verifies motor vehicle liability insurance coverage through the online insurance verification system.
(2) Operates a vehicle the registration of which is suspended or revoked pursuant to the provisions of this chapter.
(3) Operates a motor vehicle and presents evidence of insurance when there is no valid insurance in effect on the motor vehicle as required by this chapter.
(c) A motor vehicle may be impounded at the discretion of a law enforcement officer if the operator fails to provide evidence of registration and insurance as required by Title 32 or Title 40. Evidence of registration and insurance may be verified through the online insurance verification system and other electronic means as necessary.
(d) For the purposes of this chapter, the reference herein to operating a motor vehicle shall be satisfied whenever it is apparent that the vehicle has traveled any distance upon a public road or highway and a law enforcement officer may have only observed the results of finding the vehicle stopped either on or off the public road or highway, as for example when the vehicle has come to a stop after an accident. Witnessing the operation of the vehicle is not required for a citation to be issued under this chapter.
§32-7A-17.
(a) License plate issuing officials shall not register or re-register a motor vehicle or transfer the license plates if the registration is suspended pursuant to Section 32-7A-12.
(b) Notwithstanding the provisions of subsection (a), upon the request of the registrant, the license plate issuing official shall reinstate a registrant's suspended registration at such time the registrant meets the provisions of reinstatement provided for by this chapter.
(c) No vehicle registration or renewal thereof shall be issued to any motor vehicle unless the license plate issuing official receives satisfactory evidence of insurance or verification of motor vehicle liability insurance through the online insurance verification system, liability insurance bond, or deposit of cash that provides the minimum motor vehicle insurance coverage required by Section 32-7-6 or is exempted under Section 32-7A-5. Verification by the license plate issuing official shall be made in a manner as prescribed by the department.
(d) All officials authorized by law to issue motor vehicle license plates shall obtain, when issuing or transferring motor vehicle registrations, the registrant's valid state issued driver's license or identification card number, a department approved federal identifying number, national driver's license, or for a company or other entity, the federal employer identification number, for inclusion within the motor vehicle registration records in the state and county databases provided these numbers shall not be included on the motor vehicle registration receipts. The department has the additional authority to assign an identifying number to vehicle registrants in order to document compliance with this chapter. This information shall be used by the department in the administration of the provisions of this chapter.
§32-7A-18.
No verification procedure established under this chapter shall include individual inspections of vehicles on the public streets or highways solely for the purpose of verifying the existence of a valid liability insurance policy or a commercial automobile liability insurance policy. No law enforcement officer shall stop a vehicle solely for the purpose of verifying the existence of a valid insurance policy.
§32-7A-19.
No state or local governmental unit and no government official or employee acting in the course of his or her official duties in the administration or enforcement of Section 32-7A-4 and related provisions of this chapter shall be liable for any damages brought directly or indirectly by the injured party or a third party, except for damages resulting from willful and wanton misconduct or gross negligence on the part of the governmental unit, official, or employee.
§32-7A-20.
Whenever a court convicts a person of a violation of Section 32-7A-15 or Section 32-7A-16, the clerk of the court, within 10 calendar days, shall forward a report of the conviction to the department in a form prescribed by the department.
§32-7A-21.
The following penalties are applicable to violations of this chapter:
(1) FELONIES. A person convicted of a felony for the violation of a provision of this chapter is guilty of a Class C felony and is subject to punishment as defined by the Criminal Code of Alabama.
(2) MISDEMEANORS. A person convicted of a misdemeanor for the violation of a provision of this chapter is guilty of a Class C misdemeanor and is subject to punishment as defined by the Criminal Code of Alabama.
(3) TRAFFIC VIOLATION. A person convicted of a traffic offense for violation of this chapter is subject to a punishment by a fine not to exceed two hundred dollars ($200) for the first conviction. Upon each subsequent conviction, the fine shall be twice the amount of the last fine.
§32-7A-22.
No person shall present evidence of insurance to a law enforcement officer, court, officer of the court, the Department of Revenue, or office of the licensing official charged with motor vehicle registration and titling responsibilities, knowing there is no valid liability insurance in effect on the motor vehicle as required under Section 32-7A-4 or knowing the evidence of insurance is altered, counterfeit, or otherwise invalid as evidence of insurance required under Section 32-7A-4. If the law enforcement officer issues a citation to a motor vehicle operator for presenting invalid evidence of insurance, the officer shall confiscate the evidence for presentation in court.
Section 4. Sections 32-7A-23, 32-7A-24, and 32-7A-25 are added to the Code of Alabama 1975, to read as follows:
§32-7A-23.
No person charged with violating the requirements of this chapter to maintain or present, or both, evidence of insurance shall be convicted of a Class C misdemeanor in accordance with subsection (a) of Section 32-7A-16 if such person produces in court satisfactory evidence that, at the time of the citation, the motor vehicle was covered by a liability insurance policy, commercial automobile liability insurance policy, liability insurance bond, or deposit of cash in accordance with Section 32-7A-4. However, such person may be convicted of a traffic violation as set forth in subsection (b) of Section 32-7A-16.
§32-7A-24.
Information regarding the motor vehicle registration suspension or reinstatement status of any person is confidential and shall be released only to the person who is the subject of a suspension or possible suspension, or to law enforcement agencies, courts, and other governmental entities, including officials responsible for the issuance of license plates, as necessary in the administration of the provisions of this chapter.
§32-7A-25.
This chapter is supplemental to other laws relative to motor vehicles and a liability insurance policy, commercial automobile liability insurance policy, liability insurance bond, or deposit of cash, and insofar as possible shall be construed in pari materia with such laws.
Section 5. Chapter 7B of Title 32 consisting of Sections 32-7B-1, 32-7B-2, and 32-7B-3 are added to the Code of Alabama 1975, to read as follows:
§32-7B-1.
This chapter may be cited as the Alabama Online Insurance Verification System Act.
§32-7B-2. Definitions.
For the purposes of this article, the following terms shall have the following meanings respectively ascribed to them in this section, except in those instances where the context clearly indicates a different meaning:
(1) ADVISORY COUNCIL. A group of 13 voting members consisting of: Two representatives of the Department of Revenue, a representative of the Department of Public Safety, and a representative of the Department of Insurance as well as three insurance company representatives appointed by the Commissioner of Insurance, a representative of the American Insurance Association, a representative of the National Association of Mutual Insurance Companies, a representative of the Property and Casualty Insurers Association of America, a representative of the Alabama Independent Agents Association, a representative of the Alabama Probate Judges Association appointed by the president of the association, and a representative of the Alabama Association of Tax Administrators appointed by the president of the association. This group shall be chaired by the Commissioner of Revenue or his or her designee.
(2) COMMERCIAL AUTOMOBILE LIABILITY INSURANCE POLICY. An insurance policy as defined in Section 32-7A-2.
(3) DEPARTMENT. The Department of Revenue.
(4) INSURER. An insurance company licensed or authorized to do business in this state and insuring motor vehicles.
(5) MOTOR VEHICLE. A motor vehicle as defined in Section 32-7A-2.
(6) ONLINE INSURANCE VERIFICATION SYSTEM. An online insurance verification system using web services as recommended by the Insurance Industry Committee for Motor Vehicle Administration (IICMVA), developed by the advisory council, and adopted by the department.
§32-7B-3. Establishment of the Online Insurance Verification System.
(a) The department shall convene an advisory council for the purpose of the following:
(1) Facilitating the implementation of the online insurance verification system.
(2) Assisting in the development of a detailed guide for insurers providing for the data fields and other information necessary for compliance along with other necessary regulations.
(3) Coordinating and conducting a testing phase as prescribed by the advisory council.
(4) Identifying necessary changes during the testing phase, as prescribed by the advisory council.
(5) Issuing recommendations based on periodic reviews of the online insurance verification system by the advisory council. The advisory council shall issue a report to the Departments of Revenue, Public Safety, and Insurance 12 months after the online insurance verification system is implemented to evaluate the system's effectiveness in identifying uninsured motorists, and annually thereafter on or before January 1 of each year. The advisory council may also issue recommendations for system enhancements in such report.
(b) The department shall:
(1) Cooperate with insurers in implementing the online insurance verification system.
(2) Conduct a pilot project to test the online insurance verification system prior to statewide use.
(3) Establish the online insurance verification system framework necessary to inquire of insurers by using multiple keys for greater matching accuracy, including, but not limited to: Insurer NAIC number, vehicle identification numbers, policy number and other key or keys specified by the advisory council.
(4) Be responsible for keeping the advisory council informed on implementation status.
(c) Each insurer shall cooperate with the department in establishing the online insurance verification system.
Section 6. Chapter 7B of Title 32 consisting of Sections 32-7B-4, 32-7B-5, and 32-7B-6 are added to the Code of Alabama 1975, to read as follows:
§32-7B-4. Functions of the Online Insurance Verification System.
The online insurance verification system shall:
(1) Be accessible by authorized personnel of the department for direct inquiry. Access by the courts, insurers, law enforcement, and offices of the licensing officials charged with motor vehicle registration and titling responsibilities shall be through authorized personnel of the department. Insurer access shall be limited to data or information transmission as required to operate the online insurance verification system.
(2) Be able to verify, on a 24-hour, seven days per week basis, minus permitted down time for system maintenance as prescribed by the advisory council, the insurance status of a motor vehicle via the Internet, or similar electronic system consistent with insurance industry and IICMVA recommendations and the specifications and standards of the IICMVA model dated May 8, 2008, or later models as recommended by the advisory council and adopted by the department.
(3) Be able to access insurers by using multiple keys for greater matching accuracy, including, but not limited to: Insurer NAIC number, vehicle identification numbers, policy number and other key or keys specified by the advisory council.
(4) Provide data security for the type of information transferred as prescribed by the advisory council.
(5) Utilize open and agreed to data and data transmission standards and standard schema as specified by the advisory council.
§32-7B-5. Responsibilities of Insurers.
Each insurer shall do the following:
(1) Cooperate with the department in operating the online insurance verification system.
(2) Maintain the data necessary to verify insurance status through the online insurance verification system for a period of at least six months.
(3) Maintain the web service, pursuant to the requirements established under the online insurance verification system and as specified by the advisory council.
(4) Provide data security for the type of information transferred as prescribed by the advisory council that will not violate state or federal privacy laws.
(5) Be immune from civil and administrative liability for good faith efforts to comply with the terms of this act.
(6) Provide an insured under a commercial automobile insurance liability policy with an insurance card clearly indicating that the vehicle is insured under a commercial automobile liability insurance policy in accordance with Section 32-7A-6.
(7) Nothing in this section prohibits an insurer from using the services of a third party vendor for facilitating the online insurance verification system required by this act.
§32-7B-6. Responsibilities of the Department.
The department shall do the following:
(1) Cooperate with insurers in operating the online insurance verification system.
(2) Maintain the list of authorized requesting entities and individuals and make that a part of the online insurance verification system.
(3) Maintain the online insurance verification system framework necessary to inquire of insurers using the key or keys in accordance with subsection (3) of Section 32-7B-4.
(4) Provide data security for the type of information transferred as prescribed by the advisory council. Data secured via the online insurance verification system may not be shared with any party other than those permitted by state or federal privacy laws.
(5) Be responsible for keeping the advisory council informed on functionality, and planned or unplanned service interruptions.
(6) Provide alternative methods of reporting for small insurers writing no more than 500 vehicles in the state as prescribed by the department.
(7) Work with the advisory council on issues as they emerge for an equitable resolution for all parties.
(8) Maintain historical records of online insurance verification system data for a period as specified by the department.
(9) Provide a means to separately track or distinguish motor vehicles where the owner is a qualified self-insured and financial responsibility is provided via a certificate of insurance, a motor vehicle liability bond, a deposit of cash, or other such method as allowed by law.
(10) Nothing in this section prohibits the department from using the services of a third party vendor for facilitating the insurance verification program required by this law.
Section 7. Enforcement and investigative activities as they relate to the provisions of this act shall not be based on an individual's race, color, religion, sex, national origin, ancestry, age, marital status, physical or mental disability, economic status, or geography.
Section 8. All laws or parts of laws which conflict with this act are repealed.
Section 9. Sections 2, 5, and 7 of this act shall become effective immediately following its passage and approval by the Governor, or its otherwise becoming law. Sections 1, 3, 4, and 6 of this act shall become effective January 1, 2013, following its passage and approval by the Governor, or its otherwise becoming law, except that portion of Section 3 containing the reenacted Section 32-7A-12 of the Code of Alabama 1975, shall become effective immediately following this act's passage and approval by the Governor, or its otherwise becoming law.