(Bob Feldman) – Having spent 36 years with insurance enforcement in Nevada and chaired the governor’s SAGE Commission Task Force on DMV, I can speak with some authority on what can and cannot be done to reduce uninsured motorists and generate additional revenue for our state.
This is a complex subject and you should be well informed, particularly in this special emergency legislative session. The message below was emailed to Governor Gibbons’ staff on February 12th.
Currently, DMV performs an electronic match on 100% of VEHICLES REGISTERED IN NEVADA via electronic insurance records. If insurance is terminated on any vehicle the insurer notifies DMV for enforcement. Past problems with DMV’s antiquated Insurance Verification System created substantial errors, thereby reducing enforcement capabilities and creating additional expense.
After substantial review of private vendors it was decided that DMV re-write their entire Insurance Verification System into a web based “real time” system based on national standards created jointly by DMVs and the insurance industry.
In November 2008, IFC approved $367,000 in overtime pay to re-write this system. Programming commenced January 2009. The system is scheduled to go “live” on March 15, 2010.
After numerous SAGE Commission meetings with DMV management, I believe that after a few “bugs” are ironed out in this complex system, Nevada will have “state of the art” insurance enforcement technology to reduce uninsured motorists, increase premium tax and other revenue and reduce DMV staff by 10FTEs.
Insure Net has no systems in operation in the USA. Their proposed system claims they can photograph license plates and match to insurance records nationally, which WOULD NOT produce 100% tracking of vehicles registered in Nevada because that would take cameras on every street, impractical if not impossible, not to mention privacy issues.
Furthermore, to photograph and track “out of state” license plates of tourists and visitors and attempt to match to insurance records in other states would generate huge error levels, unproductive and nasty correspondence to visitors. Enforcement of “out of state” residents across state lines is highly problematic. While we are doing everything possible to increase tourism, this would be a public relations nightmare.
(The following is a letter on this subject Mr. Feldman submitted to the Governor’s office on February 12, 2010)
Insure Net is attempting to get this item on the agenda via the governor’s office, an attempt to use their $100 million additional revenue source as one budget savior. That projection is absurd. Everyone needs the facts.
I just received my copy of the Insurance Information InstituteI 2010 Insurance Fact Book. On page 60 it lists the average Nevada liability premium for 2007 as $645. On page 69 it lists the Nevada uninsured motorist count at 15% as of 2007, although I would estimate an increase to approximately 18% for 2009.
No state has ever attained 100% compliance. New York has spent over $50 million annually on insurance enforcement for 30+ years with between 90-95% compliance.
Our SAGE Commission Report to the governor, based on new enforcement passed by the 2009 legislature plus the new “Nevada Live” Insurance Verification System will hopefully reduce the uninsured motorist count by 50%. With approximately 2.3 million vehicles registered in Nevada, that would increase insured vehicles by approximately 207,000 and premium revenue by $134 million, generating additional premium tax revenue of $4.7 million at our current 3.5% premium tax rate. At SAGE, we took a conservative approach, estimating an additional $3.5 million in additional annual revenue. IMPOSSIBLE TO COLLECT AN ADDITIONAL $100 MILLION at the current registered vehicle count which is currently declining slightly due to the economy and a net loss of residents.
New enforcement laws requiring Nevada “proof of insurance” for all new registrations are effective at DMV since 2-1-10. “Nevada Live” is currently scheduled to go “live” March 15th. After all “bugs” are ironed out we proposed a “phase 2” which DMV IT staff can program internally, for issuance of all Nevada Temporary “proof of insurance” cards “on-line” from DMV’s website. That phase would eliminate 95% of fraudulent “proof of insurance” and provide immediate “real time” access for law enforcement, courts and authorized parties while reducing DMV and industry expenses.
Insure Net has ZERO enforcement ability. That must come from DMV, law enforcement and courts. Aside from privacy and other issues and a powerful lobbyist, Insure Net’s program and projections have ZERO credibility. Should there be any questions please feel free to contact me.
(Mr. Feldman is president of Nevada General Insurance Company)