Interim Joint Committee on Banking and Insurance


Minutes of the<MeetNo1> 3rd Meeting

of the 2002 Interim


<MeetMDY1> November 26, 2002


The<MeetNo2> 3rd meeting of the Interim Joint Committee on Banking and Insurance was held on<Day> Tuesday,<MeetMDY2> November 26, 2002, at<MeetTime> 10:00 AM, in<Room> Room 149 of the Capitol Annex. Senator Tom Buford, Chair, called the meeting to order, and the secretary called the roll.


Present were:


Members:<Members> Senator Tom Buford, Co-Chair; Representative James Bruce, Co-Chair; Senators Lindy Casebier, Julie Denton, Ray Jones II, Marshall Long, R.J. Palmer II, Albert Robinson, and Dan Seum; Representatives Sheldon Baugh, James Comer, Ron Crimm, Robert Damron, Mike Denham, Joseph Fischer, Danny Ford, James Gooch, Dennis Horlander, Don Pasley, Steve Riggs, Roger Thomas, Ken Upchurch, and Rob Wilkey.


Guests:  Mack Bushart, Commissioner, Department of Vehicle Registration.


LRC Staff:  Greg Freedman, Emily Bottoms, Rhonda Franklin,  and Jamie Griffin.


Mac Bushart addressed the committee regarding the current on-line vehicle registration (AVIS) and the possibility of including auto insurance information.  Mr. Bushart stated that the current system only requires the owner’s name and the vehicle identification number (VIN).  He stated that the system has the capacity to add additional information and could be updated to include insurance coverage information.


Senator Tom Buford asked if the insurance coverage information were to be added did Mr. Bushart think insurance companies would be willing to work with Transportation on this project.  Mr. Bushart stated yes.  Senator Buford stated that he was aware of  three private companies in the United States that will load all the information into the system.


Mr. Bushart stated that currently the Transportation Cabinet monitors people who live in Kentucky but have cars licensed in other states.  The Cabinet notifies those people and bills them.


Representative Sheldon Baugh asked who would be responsible for getting the information to the Transportation Cabinet.  Mr. Bushart stated he assumes it would be the insurance companies.


Representative Steve Riggs asked if the current system could handle this much information.  Mr. Bushart stated that he thinks it would and could last 10-15 years before it would need to be replaced.


Representative Ken Upchurch asked who would be able to access this system.  Mr. Bushart stated it would be a secure environment and would be maintained by the Governor’s Office of Technology.


Representative Ron Crimm addressed the committee regarding BR 133-AN ACT relating to motor vehicles.  He stated that this is a consumer friendly bill.  He stated that there will be changes to the bill, but, the basic concept will be followed.  He stated that he has met with Mr. Bushart and the Department of Insurance regarding this legislation and will continue to work with them and legislators that may have concerns.  He stated that he feels this is a step in the right direction to correct the problems of vehicles being driven without insurance coverage. 


Representative Jim Gooch stated that it really needs to be a system that will work well and not have loopholes.


Representative Steve Riggs stated that they must plan for mistakes and he feels that there will still have to be insurance cards issued to insured individuals.  He also stated that the judicial side must be considered.


Senator Julie Denton stated that uninsured drivers are costing everyone.  She stated that Representative Crimm may want to include county clerk’s in the bill.  She said that they could possibly help check for a lapse in coverage.


Representative James Comer stated independent agents should also report non payment of billing before the actual cancellation of a policy.


            Mr. Bushart stated that currently insurance companies report cancellation of policies.  He stated that there are approximately 20,000 cancellations per month.  He stated that some of those are people changing companies.  He stated that they are watching people whose coverage expires 45 days from the beginning of their policies.  Those people are watched and notified at this time.


            Senator Ray Jones stated that the bill may want to include that county clerk’s notify the vehicle owner and ask for the license plate to be surrendered and if they don’t, issue a summons.  He stated that someone should have to appear before district court and pay a penalty.  He also stated that the reinstatement fee should be raised to $500.00.


            Representative Sheldon Baugh stated that you would have to have the cooperation of the county clerks.  He stated that you would have to consider the political aspect of the situation.


            Senator Albert Robinson stated that he did not feel that a $500 fine would work.  He stated that he feels a criminal offense must be present.


            Representative Ron Crimm stated that all of these suggestions will be considered in the changes to the bill and he would be meeting with the Department of Transportation and Department of Insurance as well as other parties that will be involved.


            With no further business, the meeting adjourned.