S T A T E   O F   N E W   Y O R K
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                                  5331--A
     Cal. No. 580
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             February 20, 2025
                                ___________
 
 Introduced  by  Sens.  BAILEY,  ADDABBO, FAHY, HELMING -- read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Transportation  --  reported favorably from said committee, ordered to
   first and second report, ordered  to  a  third  reading,  amended  and
   ordered reprinted, retaining its place in the order of third reading
 
 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:
 
   Section 1. Subdivision 1 of section 312-a of the vehicle  and  traffic
 law,  as  amended by chapter 781 of the laws of 1983, is amended to read
 as follows:
   1. Upon issuance of an owner's policy of liability insurance or  other
 financial  security  required  by  this  chapter, an insurer shall issue
 proof of insurance in accordance with the regulations promulgated by the
 commissioner pursuant to [paragraph (b) of] subdivision two  of  section
 three hundred thirteen of this article.
   § 2. Subdivisions 2, 3 and 4 of section 313 of the vehicle and traffic
 law,  subdivision 2 as amended by chapter 678 of the laws of 1997, para-
 graphs (a), (b) and (d) of subdivision 2 and subdivision 4 as amended by
 chapter 509 of the laws of 1998,  paragraph  (b)  of  subdivision  4  as
 amended by chapter 161 of the laws of 2004, paragraph (d) of subdivision
 4  as further amended by section 104 of part A of chapter 62 of the laws
 of 2011, and subdivision 3 as amended by chapter  781  of  the  laws  of
 1983, are amended to read as follows:
   2.  [(a) Upon the termination of an owner's policy of liability insur-
 ance, other than an owner's policy of liability insurance for a motorcy-
 cle, at the request of the insured or by cancellation  by  the  insurer,
 the  insurer  shall  file a notice of termination with reference to such
 policy, as opposed to any insured vehicle or vehicles under such policy,
 with the commissioner not later than thirty days following the effective

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD08820-06-5
 S. 5331--A                          2

 date of such cancellation or other termination, in accordance  with  the
 regulations  required  by  paragraph (c) of this subdivision. An insurer
 shall not file a notice of termination with the commissioner  except  as
 required by this subdivision.
   (b)  Upon the issuance of an owner's policy of liability insurance the
 insurer shall file a notice or confirmation of issuance  with  reference
 to such policy not later than fourteen days following the effective date
 of  such issuance, and not later than seven days following the effective
 date for policies issued after  January  first,  two  thousand  one,  in
 accordance with the regulations required by paragraph (c) of this subdi-
 vision.
   (c)] The commissioner shall promulgate regulations establishing proce-
 dures  for issuance of proof of insurance [and for reporting by insurers
 of notices of termination and policy issuance, either electronically  or
 by  paper copy, at the option of the department. Such reporting shall be
 required for every cancellation or termination which is effective on  or
 after  July  first,  nineteen  hundred  eighty-four and for every policy
 issuance which is effective on or after  January  first,  two  thousand;
 provided,  however,  that should the commissioner find, after testing of
 reporting procedures, that it would be feasible to require reporting for
 policy cancellations, terminations or issuances effective on an  earlier
 date,  he  may  by regulation so require reporting on such earlier date,
 but in no event shall reporting be required for cancellations or  termi-
 nations  effective prior to February first, nineteen hundred eighty-four
 nor for policy issuances effective prior to  September  first,  nineteen
 hundred ninety-nine. Insurers shall cooperate fully with the commission-
 er in any such testing of reporting procedures.
   (d)  Upon  application  by an insurer, the commissioner may extend the
 period for filing of notices of termination by such insurer  for  up  to
 fifteen  days,  and  for  seven  days for policies issued by an insurer.
 Extensions shall not be granted unless the insurer demonstrates  to  the
 satisfaction  of the commissioner that compliance with the notice period
 would result in substantial hardship to the  insurer.  The  commissioner
 shall maintain a list of extensions granted pursuant to this paragraph].
   3.  A  cancellation  or termination for which notice is required to be
 filed with  the  commissioner  [pursuant  to  subdivision  two  of  this
 section]  shall  not be effective with respect to persons other than the
 named insured and members of the insured's household until  the  insurer
 has filed a notice thereof with the commissioner or until another insur-
 ance  policy  covering  the  same  risk has been procured, except that a
 notice filed with the commissioner, in  the  format  prescribed  by  the
 commissioner,  [within  the period prescribed in subdivision two of this
 section] shall be effective as of the date certified therein, regardless
 of whether a suspension  order  is  issued  pursuant  to  section  three
 hundred  eighteen of this article. A receipt from the department stating
 that a notice of termination has been filed shall be  deemed  conclusive
 evidence of such filing. An insurer shall cooperate with the commission-
 er in attempting to identify persons not in compliance with this article
 in  cases  where the information reported by the insurer does not corre-
 spond with records maintained by the department.
   4. Notwithstanding any other provision of this article to the  contra-
 ry,  the  commissioner  shall establish a [pilot program] SYSTEM FOR THE
 ONLINE VERIFICATION OF MOTOR VEHICLE LIABILITY  INSURANCE  to  [maintain
 an]  ENABLE  THE COMMISSIONER TO ACCESS up-to-date insured vehicle iden-
 tification [database] INFORMATION to  assist  in  identifying  uninsured
 motor  vehicles,  AND  SHALL  VERIFY  MOTOR  VEHICLE OWNERS' POLICIES OF
 S. 5331--A                          3

 LIABILITY INSURANCE THROUGH THE UTILIZATION OF SUCH ONLINE  VERIFICATION
 SYSTEM.    Such  [databases]  ONLINE VERIFICATION SYSTEM shall be imple-
 mented by the department pursuant to standards prescribed by the commis-
 sioner [or an agent designated by the commissioner which] WHO shall seek
 technical  assistance from affected insurers and the New York Automobile
 Insurance Plan. This [program] ONLINE VERIFICATION SYSTEM shall  utilize
 all  information  collected  pursuant  to  this  section  and shall also
 include the following elements:
   (a) [In addition to and in conjunction with the provisions of subdivi-
 sion two of this section, insurers] INSURERS that write private  passen-
 ger  or  commercial  motor  vehicle  insurance in this state shall [also
 submit to the department, either electronically or by paper copy, at the
 option of the department], WITH RESPECT TO EVERY MOTOR  VEHICLE  INSURED
 BY  SUCH INSURER IN THE STATE AND IN COMPLIANCE WITH ANY RULES AND REGU-
 LATIONS PROMULGATED BY THE  COMMISSIONER  FOR  THE  ONLINE  VERIFICATION
 SYSTEM ESTABLISHED PURSUANT TO THIS SUBDIVISION, PROVIDE THE COMMISSION-
 ER  ACCESS  TO information that identifies those MOTOR VEHICLE LIABILITY
 INSURANCE policies that have been cancelled, terminated  or  non-renewed
 and  all  SUCH policies that have been issued, the date when such insur-
 ance lapses, and any  other  information  that  the  commissioner  deems
 necessary  to  efficiently identify and track uninsured vehicles in this
 state such as a policyholder's address, policy number, vehicle registra-
 tion number, and  vehicle  identification  number.  The  department  may
 exempt from such [pilot program] ONLINE VERIFICATION SYSTEM the transfer
 of  information  on  certain classifications of vehicles that are in the
 opinion of the department generally insured and which it is difficult to
 identify uninsured vehicles within such classification,  such  as  large
 commercial vehicle fleets;
   (b)  [The  department  shall forward to each motor vehicle insurer, at
 such times as deemed necessary and appropriate by  the  commissioner,  a
 listing  of  all  the  registrants the department has on file as insured
 with that insurer. Such insurer shall then  review  the  listing  within
 thirty days of receipt of the listing and report to the department which
 of the registrants the insurer does not insure;
   (c)] The commissioner shall, in conjunction with the superintendent of
 state  police  and  local law enforcement officials formulate a means to
 allow INFORMATION FROM such [database] ONLINE VERIFICATION SYSTEM to  be
 easily  accessible  to on-duty law enforcement personnel in the perform-
 ance of their official duties for the purpose of  verifying  whether  an
 operator  maintains proper insurance coverage and to increase compliance
 with the motor vehicle financial security laws under  this  article  and
 article eight of this title;
   [(d)]  (C)  In  developing  the mechanism FOR SUCH ONLINE VERIFICATION
 SYSTEM to electronically transfer information  to  the  department,  the
 commissioner shall consult with the superintendent of financial services
 and insurers to adopt a standardized system of organizing, recording and
 transferring  such  information so as to minimize insurer administrative
 expenses. The commissioner shall to the maximum extent possible  utilize
 nationally  recognized electronic data information systems such as those
 developed by the American National Standards Institute or  the  American
 Association of Motor Vehicle Administrators;
   [(e)]  (D)(1)  Either  simultaneously or after the [up-dated database]
 ONLINE VERIFICATION system has been established, the commissioner  shall
 develop  a  computer indicator that can be imprinted on a vehicle regis-
 tration sticker or on a sticker to be affixed to the  insured's  license
 plate.  Such indicator system shall enable law enforcement personnel and
 S. 5331--A                          4
 
 other authorized persons when acting in the  course  of  their  official
 duties  to  access  INFORMATION  IN  the  department's [database] ONLINE
 VERIFICATION SYSTEM so that such persons can ascertain whether a vehicle
 is properly insured or not insured;
   (2)  Such computer indicator system shall enable authorized persons in
 the performance of their official duties to access information  such  as
 the  registrant's  name, vehicle identification number, name of insurer,
 current status of  insurance,  vehicle  registration  number  and  other
 information  that  the  commissioner  deems  necessary  to implement the
 provisions of this section. The commissioner in developing such computer
 indicator system shall enable authorized persons in the  performance  of
 their  official duties to access only such information that is necessary
 to detect uninsured motor vehicles or  accomplish  other  goals  clearly
 established  and authorized by law. Such computer indicator system shall
 be designed to protect the personal privacy interests of motorists;
   [(f)] (E) (I) The commissioner  shall  maintain  [an  insured  vehicle
 database] SUCH ONLINE VERIFICATION system [that is] WHICH SHALL BE accu-
 rate  to  within  a  period  of  [fourteen days and a computer indicator
 system described in paragraph (e) of this subdivision within twenty-four
 months of the effective date of this subdivision and  to  within]  seven
 days  [by January first, two thousand one. The commissioner shall submit
 to the legislature a report within eighteen months from  the  date  this
 subdivision  takes  effect  which  outlines  the  progress being made to
 implement such database and computer indicator system. After such  data-
 base  and  computer  indicator system is established and put into opera-
 tion, the commissioner shall make recommendations to the legislature  to
 alter,  minimize  or  eliminate  the  need for the issuance of insurance
 identification cards, simplify the requirements to demonstrate proof  of
 financial  security  and  certificate of insurance currently required by
 this article, eliminate the  requirement  for  production  of  proof  of
 financial  security  to  accompany  applications  for  registrations  or
 renewals thereof provided that such database indicates that  the  regis-
 trant  is  insured,  and  the  repeal  or  modification of section three
 hundred twelve-a of this  article.  The  commissioner  shall  also  make
 recommendations  to the legislature to streamline and shorten the notice
 termination requirements of subdivisions one,  two  and  three  of  this
 section  and section three hundred eighteen of this article. Such report
 shall be submitted to the legislature within twelve months from the date
 such database and indicator system has been implemented];
   (II) THE COMMISSIONER SHALL  PROVIDE  THAT  SUCH  ONLINE  VERIFICATION
 SYSTEM SHALL, AT A MINIMUM:
   (1)  HAVE  THE CAPABILITY FOR THE DEPARTMENT TO SEND REQUESTS TO MOTOR
 VEHICLE INSURERS FOR VERIFICATION OF EVIDENCE OF A MOTOR VEHICLE OWNER'S
 POLICY OF LIABILITY INSURANCE AS PRESCRIBED  BY  THIS  CHAPTER  VIA  WEB
 SERVICES,  THROUGH  THE  INTERNET,  OR  A  SIMILAR PROPRIETARY OR COMMON
 CARRIER ELECTRONIC SYSTEM, AS WELL AS  TO  RECEIVE  FROM  MOTOR  VEHICLE
 INSURERS  VERIFICATION  OF EVIDENCE OF A MOTOR VEHICLE OWNER'S POLICY OF
 LIABILITY INSURANCE IN A FORM AND MANNER AS PRESCRIBED  BY  THE  COMMIS-
 SIONER;
   (2)  INCORPORATE INFORMATION SECURITY PROTECTIONS FOR SUCH SYSTEM. FOR
 THE PURPOSES OF THIS SECTION, "INFORMATION SECURITY" SHALL MEAN PROTECT-
 ING INFORMATION AND INFORMATION SYSTEMS FROM UNAUTHORIZED  ACCESS,  USE,
 DISCLOSURE, DISRUPTION, MODIFICATION, OR DESTRUCTION IN ORDER TO PROVIDE
 (A)  INTEGRITY,  WHICH  SHALL MEAN GUARDING AGAINST IMPROPER INFORMATION
 MODIFICATION OR DESTRUCTION, AND INCLUDES ENSURING INFORMATION  NONREPU-
 DIATION AND AUTHENTICITY, (B) CONFIDENTIALITY, WHICH SHALL MEAN PRESERV-
 S. 5331--A                          5
 
 ING  AUTHORIZED  RESTRICTIONS  ON ACCESS AND DISCLOSURE, INCLUDING MEANS
 FOR PROTECTING PERSONAL PRIVACY AND  PROPRIETARY  INFORMATION,  AND  (C)
 AVAILABILITY,  WHICH  SHALL  MEAN ENSURING TIMELY AND RELIABLE ACCESS TO
 AND USE OF INFORMATION AS AUTHORIZED BY THIS SUBDIVISION;
   (3) HAVE THE CAPABILITY OF BEING UTILIZED FOR VERIFICATION OF MANDATO-
 RY  MOTOR  VEHICLE  LIABILITY  INSURANCE  COVERAGE AS PRESCRIBED BY THIS
 CHAPTER AND THE ABILITY TO BE INTERFACED, WHEREVER  AUTHORIZED  BY  LAW,
 WITH  EXISTING  OR  FUTURE  STATE  SYSTEMS,  IN  A  FORM  AND  MANNER AS
 PRESCRIBED BY THE COMMISSIONER;
   (4) HAVE THE CAPABILITY OF ENABLING THE DEPARTMENT TO  MAKE  INQUIRIES
 TO MOTOR VEHICLE INSURERS FOR EVIDENCE OF A MOTOR VEHICLE OWNER'S POLICY
 OF  LIABILITY  INSURANCE  AS SET FORTH IN PARAGRAPH (A) OF THIS SUBDIVI-
 SION;
   (5) HAVE THE CAPABILITY OF RESPONDING TO EACH REQUEST OF  THE  DEPART-
 MENT  FOR MOTOR VEHICLE LIABILITY INSURANCE INFORMATION WITHIN AN AMOUNT
 OF TIME DETERMINED BY THE COMMISSIONER; AND
   (6) HAVE THE CAPABILITY OF RESPONDING WITHIN THE TIME ESTABLISHED;
   [(g) To minimize the cost of this program,  the  commissioner,  if  he
 deems  it  necessary  and prudent, can initially limit the scope of this
 project to a select number of vehicle classifications or insurers;
   (h)] (F) Notwithstanding  any  other  provision  of  law,  information
 obtained  by  the  department  pursuant  to  this  section  shall not be
 disclosed, used, sold, accessed, utilized in any manner or  released  by
 the  department  to  any person, corporation, or state and local agency,
 except in response to a specific, individual request for  such  informa-
 tion  authorized pursuant to the federal driver's privacy protection act
 (18 U.S.C. 2721 et.seq.). The department  shall  institute  measures  to
 ensure  that only authorized persons are permitted to access such infor-
 mation for the purposes specified by this section. Persons who knowingly
 release or disclose information from such [database] ONLINE VERIFICATION
 SYSTEM for a purpose other than those described as  authorized  by  this
 section  or  to a person not entitled to receive it shall be guilty of a
 misdemeanor for each such release or disclosure; and
   [(i) The commissioner may postpone implementation of such pilot  data-
 base  and  computer  indicator system for a period of time not to exceed
 eighteen months if he or she determines that the program  is  not  ready
 for  implementation.  Should the commissioner determine that such system
 cannot be implemented during the eighteen  months  extension,  then  the
 commissioner  shall  report  to  the  legislature  the  reasons why such
 program cannot be implemented and request that the  law  be  amended  to
 delay its implementation date]
   (G)  UNDERGO  AN APPROPRIATE TESTING AND PILOT PERIOD OF NOT LESS THAN
 ONE YEAR, AFTER WHICH THE COMMISSIONER SHALL CERTIFY IN WRITING  TO  THE
 GOVERNOR,  THE TEMPORARY PRESIDENT OF THE SENATE, AND THE SPEAKER OF THE
 ASSEMBLY THAT SUCH SYSTEM IS FULLY OPERATIONAL.
   § 3. Paragraph (d) of subdivision 3 of section 317 of the vehicle  and
 traffic  law, as added by chapter 678 of the laws of 1997, is amended to
 read as follows:
   (d) To fully fund such [pilot database] system FOR THE ONLINE  VERIFI-
 CATION  OF MOTOR VEHICLE LIABILITY INSURANCE and bar code program estab-
 lished pursuant to subdivision four of section three hundred thirteen of
 this article, the commissioner shall utilize the following three sources
 of revenue: (1) twenty-five percent of all civil penalties imposed  upon
 persons  fined pursuant to paragraph (b) of subdivision one-a of section
 three hundred eighteen of this article, (2) monies obtained from  grants
 that may be awarded to the commissioner from the motor vehicle theft and
 S. 5331--A                          6
 
 insurance  fraud  prevention fund, and (3) pro rata assessments upon all
 insurance carriers subject to the provisions of this section in  propor-
 tion to the premium estimates filed by such carriers.
   §  4.  This  act shall take effect December 31, 2028.  Effective imme-
 diately, 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.