PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:
Proposed Action:
Amendment of sections 32.3, 32.5, 32.10, 32.16 and 32.17 of Title 15 NYCRR.
Statutory authority:
Vehicle and Traffic Law, sections 215(a), 311(10) and 312(4)
Subject:
Electronic insurance identification cards.
Purpose:
Authorize insurance companies to issue electronic insurance identification cards.
Substance of proposed rule (Full text is posted at the following State website:www.dmv.ny.gov):
The amendments to Part 32 of the Commissioner’s Regulations authorize the issuance of electronic insurance identification cards by insurance companies. The regulation also makes minor technical amendments, such as designating the former State Insurance Department as the New York State Department of Financial Services.
The regulation provides that:
Electronic insurance ID cards may be issued by an insurance company if the insurance company chooses to issue electronic insurance ID cards
Electronic insurance ID cards shall be acceptable as proof of insurance in the same manner as paper insurance ID cards
Electronic proof of insurance must be capable of being displayed on a portable electronic device, as defined in paragraph (a) of subdivision two of section 1225-d of the Vehicle and Traffic Law
Electronic insurance ID cards may not be issued: for temporary ID cards, entities that are self-insured or for fleet transactions, dealers or transporters, as set forth in section 32.13
Electronic insurance ID cards must meet the requirements set forth in Part 32 that are applicable to paper insurance ID cards, except as to those provisions which by their nature can have no application
An insurance company may not issue an electronic insurance ID card instead of a paper insurance ID card without the consent of the person or entity named on such insurance ID card
Text of proposed rule and any required statements and analyses may be obtained from:
Heidi Bazicki, Department of Motor Vehicles, 6 Empire State Plaza, Rm. 522A, Albany, NY 12228, (518) 474-0871, email: heidi.bazicki@dmv.ny.gov
Data, views or arguments may be submitted to:
Ida L. Traschen, Department of Motor Vehicles, 6 Empire State Plaza, Rm. 522A, Albany, NY 12228, (518) 474-0871, email: ida.traschen@dmv.ny.gov
Public comment will be received until:
45 days after publication of this notice.
Regulatory Impact Statement
1. Statutory authority: Vehicle and Traffic Law (VTL) § 215(a) provides that the Commissioner of Motor Vehicles may enact rules and regulations that regulate and control the exercise of the powers of the Department. VTL § 311(10) authorizes insurance companies to issue insurance identification cards in a form as the Commissioner may prescribe or approve, which states that the company has issued an owner’s policy of liability insurance or a financial security bond on the motor vehicle or vehicles designated on the card. VTL § 312(4) authorizes the Commissioner to promulgate reasonable regulations to provide effective administration and enforcement of the provisions of Article 6.
2. Legislative objectives: In order to register a motor vehicle in New York State, the Vehicle and Traffic Law requires the applicant to submit proof of insurance. Currently, the only acceptable proof of insurance is the paper insurance ID card. However, many insurance companies now offer an electronic insurance ID card, available in 30 states. Since the VTL authorizes the Commissioner to prescribe the form of the insurance ID card, the Commissioner has clear authority to permit the issuance of electronic insurance ID cards in this State. The electronic insurance ID cards will be displayed on the registrant’s portable electronic device.
This proposal aligns with the legislative objective of requiring motor vehicle registrants to show proof of insurance by expanding the means of displaying such proof, either at a DMV office or to a law enforcement official.
3. Needs and benefits: This proposed regulation would allow insurance companies to issue electronic insurance ID cards. Currently, only paper ID cards are accepted in this State. This rulemaking is consistent with the transition to a paperless world.
Thirty states accept electronic insurance ID cards. The electronic insurance ID cards are displayed on the customer’s portable electronic device. In lieu of having to maintain a paper ID card to show to a law enforcement official or a DMV representative, the customer will have such ID card stored on his or her electronic device, a true convenience for many customers. Insurance companies will benefit because it will increase customer satisfaction, reduce the use of paper, and lower costs associated with producing and mailing paper ID cards and replacing destroyed or lost cards.
Finally, this rule makes three technical corrections to Part 32. First, it clarifies that the full DBA of an insured must be displayed on the insurance ID card. Second, in light of statutory amendments, the State Insurance Department is now referred to as the Department of Financial Services. Third, the references to staggered effective and expiration dates for for-hire insurance cards are deleted, because the Department currently now uses staggered dates for several classes of vehicles, which are too numerous and varied to clearly enumerate in a regulation.
4. Costs: (i) Cost to the regulated parties for the implementation of and continuing compliance with the rule: There would be no cost to customers who would display the electronic insurance ID card on his or her electronic device. Since the rule is voluntary, no insurer is required to issue electronic insurance ID cards. DMV canvassed several insurers about potential cost. Only one company offered a cost estimate, which is a one-time cost of $1,200.
(ii) Costs to the agency, the State and local governments for the implementation of, and continued administration of, the rule: The Department of Motor Vehicles is purchasing 100 2D barcode ID scanners which are suited to scanning electronic insurance ID cards. Upon testing some devices containing electronic insurance ID cards, DMV determined that the scanners currently used in most offices would not effectively scan the ID cards. Therefore, DMV is purchasing the 100 scanners at a cost of $27,300, which shall be paid from the Compulsory Insurance Fund, as authorized by section 317 of the Vehicle and Traffic Law. The new scanners will be distributed to county offices that perform DMV services, so that those counties will not have to invest any resources on the scanners.
(iii) The information, including the source of such information and the methodology upon which the cost analysis is based: The Department’s Office of Operations and Office of Insurance Services, working with ITS determined that purchase of 100 new scanners is necessary so that all DMV offices can effectively scan the electronic ID cards. This conclusion is based upon testing by DMV and ITS staff of ID cards on electronic devices.
5. Local government mandates: This rule would impose no additional requirements on county offices, which offer DMV services, because they would only have to scan the electronic insurance ID displayed on the device, as they currently do with paper insurance ID cards. DMV is purchasing new scanning devices for the county offices, so that the counties will not incur new expenses.
6. Paperwork: There are no paperwork requirements.
7. Duplication: This proposal does not duplicate, overlap or conflict with any relevant rule or legal requirement of the State and federal governments.
8. Alternatives: The Department canvassed law enforcement officials to assess any concerns they might have about the proposed rule. The Division of State Police had no objection to the regulation. At the NYS Association of Chiefs of Police meeting in March 2014, a group of police chiefs did voice four concerns about the use of electronic insurance ID cards. First, they believe that viewing the portable electronic device will prolong the roadside stop, as the motorist logs in and downloads the electronic insurance ID card, thereby increasing the danger to the officer who is standing on the highway. Second, the device may be difficult to handle and/or the electronic insurance ID cards may be difficult to read, particularly at night or in inclement weather. Third, the officer who damages a device while viewing the card may face liability issues, including false claims that the device was damaged while in the officer’s possession. Finally, a motorist may accuse the officer of viewing private information that is stored on the device.
As the result of these concerns, the Department conducted a nationwide survey, through the auspices of the American Association of Motor Vehicle Administrators (AAMVA), of those states that authorize the use of electronic insurance ID cards. The administrators and law enforcement officials in those states were asked to address the four concerns raised by the police chiefs. The Department received responses from 18 states that accept the use of electronic insurance ID cards. None of the administrators or law enforcement officials shared the concerns expressed by the police chiefs. In some states, the officers are trained to view only the electronic insurance ID card and no other information on the device. In other states, the motorist holds the device while the officer reads the information on the device. Three states have laws shielding the officers from liability if the device is damaged. In light of the comments submitted in response to AAMVA’s survey, the Department believes that the police chiefs’ concerns are not borne out by the experience in states that currently authorize the use of electronic insurance ID cards.
The Department also canvassed seven insurance companies and one insurance association, PCI Property Casualty Insurers (PCI), for their comments on the proposed regulation. All of the insurers and PCI fully support the regulation. Three changes were made pursuant to their suggestions. First, it is now clear that an insurer may issue an electronic insurance ID card; it is not mandatory. Second, language was added stating that an insurer that chooses to issue an electronic insurance ID card does not have to issue a card that is adaptable for all portable electronic devices. Third, it was clarified that the full DBA name must be displayed on the insurance ID card.
One insurer requested that the Department amend the regulation to allow persons insured through the Assigned Risk Plan to receive electronic insurance ID cards. The regulation as written does not bar persons insured through the Plan from receiving electronic insurance ID cards. The temporary FS-75 card that is issued when the person initially enrolls in the plan cannot be an electronic insurance ID card. However, once the individual is assigned to an insurer through the Plan, the permanent insurance ID card may be electronic.
PCI contacted the Independent Insurance Agents and Brokers Association of NY (IIABNY) to assess any negative impact on insurance agents and brokers. IIABNY indicated that they did not anticipate a major impact on agents and brokers as a result of this regulatory change because the electronic insurance ID card option applies only to permanent ID cards, and most of their agents only deal with the temporary cards.
A no action alternative was not considered, because the Department believes that this rule provides benefits to insurers conducting business in this State and their customers.
9. Federal standards: The proposal does not exceed any minimum standards of the federal government for the same or similar subject areas.
10. Compliance schedule: The Department anticipates that all affected parties will be able to achieve compliance with the rule upon adoption.
Regulatory Flexibility Analysis
1. Effect of rule: There are an estimated 9,000 insurance agents and brokers in New York State, of which 6,100 are small businesses. The proposed rule would not have an adverse impact on the agents and brokers because they primarily issue temporary insurance cards. This proposed rule excludes the issuance of a temporary electronic insurance ID card.
This proposed rule would not have an adverse effect on the county clerks who perform DMV services. Currently, the county clerks scan paper insurance ID cards to verify the validity of the insurance. The same scanning procedure would be used for electronic insurance ID cards.
2. Compliance requirements: The DMV will notify the county clerks that electronic insurance ID cards may be submitted as proof of insurance. DMV is purchasing new scanning devices for the county offices, so that the counties will not incur new expenses.
Insurance companies may voluntarily issue electronic insurance ID cards to their customers if such cards are in compliance with the provisions of Part 32.
3. Professional services: This regulation would not require local governments or small businesses to obtain professional services.
4. Compliance costs: There would be no compliance costs for local governments. DMV is purchasing new scanning devices for the county offices, so that the counties will not incur new expenses.
Since small businesses are not affected by the rule, there would be no costs.
5. Economic and technological feasibility: The proposed rule imposes no economic burden on local governments because DMV is purchasing new scanning devices for the county offices, so that the counties will not incur new expenses.
6. Minimizing adverse impact: This proposal has no adverse impact on local governments because DMV is purchasing new scanning devices for the county offices, so that the counties will not incur new expenses.
As noted below, the Department consulted with stakeholders in the insurance industry to minimize any adverse impact on such industry.
7. Small business and local government participation: PCI Property Casualty Insurers contacted the Independent Insurance Agents and Brokers Association of NY (IIABNY) to assess any negative impact on insurance agents and brokers. IIABNY indicated that they did not anticipate a major impact on agents and brokers as a result of this regulatory change, because the electronic insurance ID card option applies only to permanent ID cards, and most of their agents only deal with the temporary cards.
Rural Area Flexibility Analysis and Job Impact Statement
A rural area flexibility analysis and a job impact statement are not required for this rulemaking proposal because it will not adversely affect rural areas or jobs.
This proposal authorizes insurance companies to issue electronic insurance ID cards. Due to its narrow focus, this rule will not impose an adverse economic impact or reporting, record keeping, or other compliance requirements on rural or urban areas or on employment opportunities.
