BILL NUMBER: S7987

SPONSOR: SEWARD
 
TITLE OF BILL:  An act to amend the insurance law, in relation to
using driving history as a rating or underwriting factor for private
passenger motor vehicle insurance

 
PURPOSE:

This bill would require verification of driving history when used as a
rating or underwriting factor for private passenger motor vehicle insur-
ance.

 
SUMMARY OF PROVISIONS:

Section one amends the insurance law to add a new section 2616 regarding
verification of driving history. The section establishes that no insurer
who utilizes an applicant's driving history as a rating or underwriting
factor for private passenger motor vehicle insurance in the state shall
bind a policy of insurance, or accept a down payment for a policy, with-
out first verifying said applicant's driving history, as well as the
              

driving history of all named-drivers listed by the applicant on the
private passenger motor vehicle insurance application, through the use
of a reliable third party database.

Section two establishes the effective date.

 
JUSTIFICATION:

There is currently a practice in the insurance community of certain
carriers of personal automobile policies binding coverage based on an
initial quote and questionnaire with the insured, and then raising the
premium following a check of the insureds driving history.  Responsible
insurance agents and companies utilize all available underwriting
resources prior to binding a policy for an insured. The practice of
intentionally disregarding driver history information in order to pres-
ent a false price to an insurance consumer undermines the credibility of
the insurance industry as a whole. Consumers should be able to rely on
the quotes for insurance policies to be fair and accurate so they can
determine whether the coverage is affordable. This practice detracts
from that ability and leaves the consumers bound to policies that are
much more expensive than originally represented and in some cases, unaf-
fordable. Requiring all carriers to run motor vehicle reports prior to
binding coverage would guarantee the consumer will receive a fair and
accurate quote prior to committing to the expense.

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law and shall apply to policies issued, renewed or modified on
or after such date. Effective immediately, any actions necessary to
implement the provisions of this act on its effective date are author-
ized and directed to be completed on or before such date.