Youngstown Daily Legal News

Proposed bill would allow electronic delivery of insurance documents

TIFFANY L. PARKS
Special to the Legal News
Published: September 26, 2013

The state’s “highly competitive auto insurance market” is poised for House Bill 20 to be signed into law.

The proposed legislation, sponsored by Rep. Michael Stinziano, D-Columbus, would allow an individual to present proof of financial responsibility to the Registrar of Motor Vehicles, a peace officer, a traffic violations bureau or a court using their smartphone.

“If consumers are demanding this type of service there are plenty of companies ready and willing to provide it,” said Dean Fadel, vice president of government relations for the Ohio Insurance Institute.

“The sales of tablets and other mobile devices are motivating consumers to want multiple communication platforms with their insurer. More often, consumers are demanding the electronic delivery of insurance documents and HB 20 will give consumers and insurers more choices and more flexibility in how policies are serviced.”

The bill would require each insurer writing motor vehicle liability insurance in Ohio to provide to every Ohio policyholder the ability to use an electronic wireless communications device to present proof of financial responsibility when required to do so by the state law.

Fadel offered proponent testimony for HB 20 before the House Transportation, Public Safety and Homeland Security committee.

The OII is a trade and information association representing Ohio-based property and casualty insurance companies and related affiliate organizations.

“In just the past two years, policy makers in half the states have changed their laws to enable consumers to use their smartphone to show they have insurance instead of using a piece of paper,” Fadel said. “Just this year alone, 17 of those 25 states approved electronic proof of coverage laws similar to HB 20. In addition, legislation is awaiting signature by governors in Illinois, Missouri and Wisconsin.”

The bill states that in order for any document or display of text or images on an electronic wireless communications device to be used as proof of financial responsibility, the document, words or images must indicate the name of the insured, the name of the insurer and the effective and expiration dates of the policy.

The text or image would have to reference all of the vehicles covered under the policy.

For the purposes of HB 20, an “electronic wireless communications device” includes any of the following: a wireless telephone, a personal digital assistant, a computer — including a laptop, netbook or tablet — or any other substantially-similar device that is designed to communicate and display text or images.

In introducing the bill into the Ohio General Assembly, Stinziano said HB 20 was crafted to keep pace with the times.

The measure is modeled after legislation enacted in other states including Alabama, California, Idaho and Louisiana.

“The reality is that the law has not been keeping up with consumers in the marketplace. As you know, people can use their smartphones and other electronic devices to board airplanes, pay bills and even file their federal tax returns,” Stinziano said.

“If they want to, my legislation would allow people to use their smartphone to show that they have automobile insurance coverage. This practical and common sense bill will modernize Ohio law.”

If the bill is enacted, Stinziano said participation would be voluntary for drivers and their insurance companies.

HB 20 states that when an individual uses a smartphone or other electronic device to show proof of insurance, only the evidence of financial responsibility displayed on the device is to be viewed by the registrar, peace officer, court representative or traffic violations bureau employee.

“No other content of the device shall be viewed for purposes of obtaining proof of financial responsibility,” the bill reads.

The proposal also says that when a person offers a smartphone or other device to another individual to show proof of insurance, the owner of the phone assumes the risk of any resulting damages to the device.

The damage provision would not apply if a registrar, officer or bureau employee “purposely, knowingly or recklessly commits an action that results in damage to the device.”

The bill prohibits any person who has knowingly failed to maintain proof of financial responsibility from presenting any text or images to a peace officer in order to mislead them into believing that a policy is valid.

An individual who violates the provision would be guilty of falsification.

HB 20 is co-sponsored by a dozen House members.

The bill has not been scheduled for additional hearings.

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