BILL NUMBER: S5331
SPONSOR: BAILEY
 
TITLE OF BILL:
An act to amend the vehicle and traffic law, in relation to establishing
an online insurance verification system for motor vehicle insurance; and
to repeal certain provisions of such law relating to motor vehicle
insurance and funds for a certain pilot database system
 
PURPOSE:
To modernize New York State's motor vehicle liability reporting system.
 
SUMMARY OF PROVISIONS:
Section 1 amends Subdivision 1 of section 312-a of the vehicle and traf-
fic law.
Section 2 Subdivision 2 of paragraphs (a), (b), (c), (d), (f), (g),
(h), and (i) of subdivision 4 of section 313 of the vehicle and traffic
law are repealed.
Section 3 amends subdivision 3 of section 313 of the vehicle and traffic
law.
Section 4 establishes the online Insurance verification system of motor
vehicle insurance.
Section 5 amends the vehicle traffic law by adding a new section 312-c.
Section 6 repeals paragraph (d) of subdivision 3 of section 317 of the
vehicle and traffic law.
 
JUSTIFICATION:
New York's current system for auto insurance verification relies on old
technology and manual processing for both the DMV and insurance carri-
ers. This results in an increased likelihood of a driver erroneously
being identified as uninsured and can result in being unfairly accused,
ticketed and possibly arrested for failure to prove insurance coverage.
Motorists who are charged with driving without insurance can face a
serious misdemeanor charge, have their car impounded, and lose their
license which may result in thousands of dollars in legal fees and court
appearances.
The "online verification of automobile liability insurance act" would
create an Online Verification system (OLV). This system allows for real-
time verification of automobile insurance and reduces the likelihood of
drivers being falsely accused of driving without insurance coverage.
Unlike the current system the OLV system verifies directly against the
insurance companies records within seconds. In addition, this system can
be used by law enforcement during roadside stops and accident investi-
gations, and within the court system. Eighteen states, including Cali-
fornia and Illinois, have adopted a version of an OLV system.
The "online verification of automobile liability insurance act" would
benefit all New York motorists. It would also address an important
social equity need - people of color and young drivers who are more
likely to have insurance verified by law enforcement at a roadside stop.
By using current insurance company data, the OLV system protects insured
individuals from being misidentified as uninsured, reducing the personal
and economic impacts. Importantly, an OLV system also protects drivers'
privacy by limiting access to legally authorized agencies and using the
most advanced methods of data encryption.
 
LEGISLATIVE HISTORY:
2023-24: S6534 - Passed Senate
 
FISCAL IMPLICATIONS:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately; provided however, section one,
two and three of this act shall take effect when the online insurance
verification system is installed and fully operational pursuant to
subdivision 5 of section 312-b of the vehicle and traffic law, as added
by section four of this act, as certified by the Commission of the
Department of Motor Vehicles. Effective immediately, the addition,
amendment and/or repeal of any rule or regulation necessary for the
implementation of this act are authorized to be made and completed on or
before such effective date.

Statutes affected:
S5331: 312-a vehicle and traffic law, 312-a(1) vehicle and traffic law, 313 vehicle and traffic law, 313(3) vehicle and traffic law, 317 vehicle and traffic law, 317(3) vehicle and traffic law