1. Combating Uninsured Driving 2011 Annual Region I Conference

2. What is the IICMVA ? Insurance Industry Committee on Motor Vehicle Administration  Non-profit, all industry advisory group  Liaison between the insurance industry and Motor Vehicle Departments  Assist with the implementation & maintenance of compulsory insurance and financial responsibility laws  Advisory and subject matter expert on other significant motor vehicle administration issues Driver Licensing Vehicle titling & branding Vehicle registration Motor vehicle records (MVR content & availability) Proof of Coverage (Auto ID Cards)

3. Who is the IICMVA ? Insurance Industry Committee on Motor Vehicle Administration  32 Individual Members Companies  3 Trade Associations  AIA – 350 Member Insurers  PCIAA – 1000 Member Insurers  NAMIC – 1400 Member Insurers  IICMVA is vendor neutral Representing a Market Share of:  50% Commercial Auto Insurance  70% Personal Auto Insurance

4. ESTIMATED PERCENTAGE OF UNINSURED MOTORISTS BY STATE, 2009 (1) (1)Percentage of uninsured drivers, as measured by the ratio of uninsured motorists (UM) claims to bodily injury (BI) claims frequencies. (2)In FL, compulsory auto laws apply to PIP and physical damage, but not to third party bodily injury coverage. Source: Insurance Research Council.

5. Reporting Today  32 States have some form of ALIR program  Cost to build & maintain ALIR programs by state & insurers  Cost passed back to policy holders (insured) & registered vehicle owners  Customers with insurance routinely identified as uninsured. 2 states are manual 12 states use EDI with X12 or Proprietary 14 state use EFTP, SFTP, FTP or HTTPS 3 states use Web Services (as primary), 4 as a secondary process 27 States have Commercial Reporting (20 Required)

6. Inherent Problems  Data Consistency DMV data vs. Insurance Company data  Data Accuracy Typographical Errors Miscommunication Outdated/Obsolete data  Timeliness Data delays inherent with technology  Security Transmitting large volumes of personal information DMV Insurance Company

7. Additional Cost  Collect & Transmit data  House, process and monitor data  More difficult to identify the true uninsured motorist  Can cause calculated UM rate to increase  Correction Process – letters & calls to customers

8. Event Based  Registration  Registration Renewal  Traffic Stop  Motor Vehicle Accident  Court Proceedings  Events found in Laws & Regulations  Laws also described the form and content of the proof or evidence of insurance  Burden on vehicle owner or vehicle operator to present evidence at the time of these events

9. Original Process ID CARD

10. Verification Identify Insurance Company (From Customer/Document) NAIC Policy Number/Policy Key (From Customer/Document) Vehicle Identification Number (Registration/Title Document) VIN Policy Key Verification Date Event Date – Registration, Renewal, Traffic Stop, MVA Date CONFIRMED!

11. Enter Technology Web Service Standards  Reliable message delivery standards were being developed  Web Services was quickly identified as an application suited for insurance verification  Simple mechanism to connect applications or devices regardless of their technology or location  Leverages the internet for low cost communication  Based on industry standards & protocols

12. OLV Model  Registration  Registration Renewal  Traffic Stop  Motor Vehicle Accident  Court Proceedings  NAIC Number  Policy Key (Policy Number)  VIN  Requested Confirmation Date Real-time Verification !!! Web services Technology for Online Verification

13. Web Services Solution The insurance company’s response indicates whether it can confirm insurance meeting the minimum financial obligations is present in their database on the date in question  It does NOT identify specific limits  Does not confirm coverage – Confirms Evidence is valid  Security Benefits - message level security Secure, encrypted transmission Personal information is not passed

14. Model In Use Motor Vehicle Department Law Enforcement Courts/DOJ Vehicle Owners (PIN) Jurisdiction System Web Services Agent (vendor or self developed) Insurer Table Ongoing Verification *Auto Rechecks *Letter Campaign Detailed Reporting *Uninsured Motorist Rate *Insurers’ Performance Insurer Table Unknown Carrier Table Automatic Rechecks Pointer Data Cancellations Optional Input *Direct Access *Web Browser Input Company A Web Service Interne t Data Storage Web Services Agent Insurance Company stores data * Real Time Inquiries processed * Highly Availably data (24/7) * 5 Second Response Time Data Storage Company B Web Service Company C Web Service Company D Web Service Data Storage

15. Best Practices  Use Evidence of Insurance  Harness technology  Enforcement is Key  Redress process Already on the books Alternative to paper/bar codes Web services to verify evidence Cost effective, efficient & secure

16. Marianne Allard Chair, Board of Directors IICMVA mmallard@Travelers.com 860-277-6299