H*5105(Rat #0415, Act #0324 of 2002)  General Bill, By Cato and A. Young
 A BILL TO AMEND CHAPTER 10, TITLE 56, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO MOTOR VEHICLE REGISTRATION AND FINANCIAL SECURITY BY ADDING
 ARTICLE 7 SO AS TO ENACT THE "MOTORIST INSURANCE IDENTIFICATION DATABASE
 PROGRAM ACT", TO PROVIDE DEFINITIONS FOR CERTAIN TERMS, TO PROVIDE THAT THE
 INTENT OF THIS ARTICLE IS TO HELP REDUCE THE UNINSURED MOTORIST POPULATION IN
 THE STATE AND TO MEASURE THE EFFECTIVENESS OF THE MOTORIST INSURANCE DATABASE
 ESTABLISHED PURSUANT TO THIS ARTICLE, AND TO ESTABLISH A DATABASE TO BE USED
 WHEN VERIFYING COMPLIANCE WITH THE STATE'S MOTOR VEHICLE FINANCIAL SECURITY
 REQUIREMENTS, TO PROVIDE THAT THE MOTORIST INSURANCE DATABASE PROGRAM SHALL BE
 ADMINISTERED BY THE MOTOR VEHICLES DIVISION IN THE DEPARTMENT OF PUBLIC
 SAFETY, TO PROVIDE THAT THE MOTOR VEHICLES DIVISION SHALL DISCLOSE AN
 INDIVIDUAL'S REPORTED DATABASE INFORMATION UPON REQUEST BY CERTAIN PERSONS AND
 AGENCIES FOR A FEE THAT MUST BE USED TO DEFRAY THE DIVISION'S EXPENSES, TO
 PROVIDE THAT THE STATE AND INSURERS ARE NOT LIABLE FOR PERFORMING THEIR LEGAL
 DUTIES PURSUANT TO THIS ARTICLE; TO AMEND SECTION 56-10-553, AS AMENDED,
 RELATING TO THE COLLECTION OF CERTAIN DATA BY THE DEPARTMENT OF PUBLIC SAFETY
 THROUGH THE USE OF RANDOM SAMPLING, SO AS TO ELIMINATE THE RANDOM SAMPLING
 PROCEDURE; TO AMEND SECTION 56-10-225, AS AMENDED, RELATING TO PROOF OF
 INSURANCE AND FINANCIAL RESPONSIBILITY BY A PERSON WHO HAS A MOTOR VEHICLE
 REGISTERED IN HIS NAME, SO AS TO MAKE TECHNICAL CHANGES, TO EXTEND THE
 DEADLINE UPON WHICH A PERSON WHO IS CHARGED WITH FAILING TO MAINTAIN PROOF OF
 INSURANCE IN HIS MOTOR VEHICLE MAY HAVE THE CHARGE DISMISSED UPON SHOWING THE
 COURT THAT THE MOTOR VEHICLE WAS INSURED AT THE TIME HE WAS CHARGED, AND TO
 REVISE THE PENALTY FOR THIS OFFENSE; TO AMEND SECTION 56-10-520, AS AMENDED,
 RELATING TO THE REQUIREMENT THAT A PERSON WHO SEEKS TO REGISTER A MOTOR
 VEHICLE MUST DECLARE THAT THE VEHICLE TO BE REGISTERED IS INSURED, SO AS TO
 REVISE THE PENALTIES FOR A

   04/11/02  House  Introduced and read first time HJ-43
   04/11/02  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-44
   04/24/02  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-7
   04/30/02  House  Amended HJ-16
   04/30/02  House  Read second time HJ-27
   05/01/02  House  Read third time and sent to Senate HJ-10
   05/01/02  Senate Introduced and read first time SJ-9
   05/01/02  Senate Referred to Committee on Banking and Insurance SJ-9
   05/15/02  Senate Recalled from Committee on Banking and Insurance SJ-4
   05/16/02  Senate Amended SJ-73
   05/16/02  Senate Read second time SJ-73
   05/21/02  Senate Read third time and returned to House with
                     amendments SJ-12
   05/23/02  House  Concurred in Senate amendment and enrolled HJ-37
   05/30/02         Ratified R 415
   06/04/02         Signed By Governor
   07/03/02         Effective date 07/01/02; See act for exceptions
                     to effective date
   07/03/02         Copies available
   07/25/02         Act No. 324

AN ACT TO AMEND CHAPTER 10, TITLE 56, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO MOTOR VEHICLE REGISTRATION AND FINANCIAL SECURITY BY ADDING ARTICLE 7 SO AS TO ENACT THE "MOTORIST INSURANCE IDENTIFICATION DATABASE PROGRAM ACT", TO PROVIDE DEFINITIONS FOR CERTAIN TERMS, TO PROVIDE THAT THE INTENT OF THIS ARTICLE IS TO HELP REDUCE THE UNINSURED MOTORIST POPULATION IN THE STATE AND TO MEASURE THE EFFECTIVENESS OF THE MOTORIST INSURANCE DATABASE ESTABLISHED PURSUANT TO THIS ARTICLE, AND TO ESTABLISH A DATABASE TO BE USED WHEN VERIFYING COMPLIANCE WITH THE STATE'S MOTOR VEHICLE FINANCIAL SECURITY REQUIREMENTS, TO PROVIDE THAT THE MOTORIST INSURANCE DATABASE PROGRAM SHALL BE ADMINISTERED BY THE MOTOR VEHICLES DIVISION IN THE DEPARTMENT OF PUBLIC SAFETY, TO PROVIDE THAT THE MOTOR VEHICLES DIVISION SHALL DISCLOSE AN INDIVIDUAL'S REPORTED DATABASE INFORMATION UPON REQUEST BY CERTAIN PERSONS AND AGENCIES FOR A FEE THAT MUST BE USED TO DEFRAY THE DIVISION'S EXPENSES, TO PROVIDE THAT THE STATE AND INSURERS ARE NOT LIABLE FOR PERFORMING THEIR LEGAL DUTIES PURSUANT TO THIS ARTICLE; TO AMEND SECTION 56-10-553, AS AMENDED, RELATING TO THE COLLECTION OF CERTAIN DATA BY THE DEPARTMENT OF PUBLIC SAFETY THROUGH THE USE OF RANDOM SAMPLING, SO AS TO ELIMINATE THE RANDOM SAMPLING PROCEDURE; TO AMEND SECTION 56-10-225, AS AMENDED, RELATING TO PROOF OF INSURANCE AND FINANCIAL RESPONSIBILITY BY A PERSON WHO HAS A MOTOR VEHICLE REGISTERED IN HIS NAME, SO AS TO MAKE TECHNICAL CHANGES, TO EXTEND THE DEADLINE UPON WHICH A PERSON WHO IS CHARGED WITH FAILING TO MAINTAIN PROOF OF INSURANCE IN HIS MOTOR VEHICLE MAY HAVE THE CHARGE DISMISSED UPON SHOWING THE COURT THAT THE MOTOR VEHICLE WAS INSURED AT THE TIME HE WAS CHARGED, AND TO REVISE THE PENALTY FOR THIS OFFENSE; TO AMEND SECTION 56-10-520, AS AMENDED, RELATING TO THE REQUIREMENT THAT A PERSON WHO SEEKS TO REGISTER A MOTOR VEHICLE MUST DECLARE THAT THE VEHICLE TO BE REGISTERED IS INSURED, SO AS TO REVISE THE PENALTIES FOR A PERSON WHO OPERATES AN UNINSURED MOTOR VEHICLE, AND A PERSON WHO PRESENTS A FALSE CERTIFICATE THAT A MOTOR VEHICLE IS AN INSURED MOTOR VEHICLE OR FALSE EVIDENCE THAT A MOTOR VEHICLE SOUGHT TO BE REGISTERED IS AN INSURED MOTOR VEHICLE, TO DELETE THE PROVISION THAT MAKES CERTAIN PORTIONS OF THIS SECTION INAPPLICABLE IF THE MOTOR VEHICLE OWNER HAD GOOD CAUSE TO BELIEVE AND BELIEVED THAT THE MOTOR VEHICLE WAS INSURED, TO MAKE TECHNICAL CHANGES, TO SUBSTITUTE THE TERM "NOTICE OF VIOLATION" FOR THE TERM "RECORD OF HIS CONVICTION OF VIOLATION", TO PROVIDE THAT THE DIRECTOR OF THE DEPARTMENT OF PUBLIC SAFETY MAY RELIEVE A PERSON OF THE REQUIREMENT OF FURNISHING PROOF OF FUTURE FINANCIAL RESPONSIBILITY WHEN THREE YEARS HAVE ELAPSED FROM THE DATE PROOF WAS REQUIRED INSTEAD OF FROM THE DATE OF SUSPENSION; TO AMEND SECTION 56-10-40, AS AMENDED, RELATING TO THE REQUIREMENT THAT PROVIDERS OF LIABILITY INSURANCE AND PROVIDERS OF SECURITY IN LIEU OF LIABILITY INSURANCE MUST NOTIFY THE DEPARTMENT OF PUBLIC SAFETY OF THE LAPSE OR TERMINATION OF AN INSURANCE POLICY OR SECURITY IT HAS ISSUED, AND THAT PROVIDES THAT THE DEPARTMENT MUST NOTIFY THE PERSON WHOSE INSURANCE POLICY OR SECURITY HAS LAPSED OR HAS BEEN TERMINATED, SO AS TO REVISE THE PROCEDURE IN WHICH AN INSURANCE PROVIDER MUST NOTIFY THE DEPARTMENT WHEN AN INSURANCE POLICY OR SECURITY HAS LAPSED OR HAS BEEN TERMINATED; TO AMEND SECTION 56-10-240, AS AMENDED, RELATING TO THE REQUIREMENT THAT AN UNINSURED MOTOR VEHICLE MUST BE INSURED WITHIN A SPECIFIC PERIOD OF TIME OR THE OWNER MUST SURRENDER ITS REGISTRATION AND LICENSE PLATE, SO AS TO DELETE THE PROVISION THAT PROVIDES THE PROCEDURE IN WHICH AN INSURER MUST INFORM THE DEPARTMENT OF PUBLIC SAFETY WHEN A MOTOR VEHICLE BECOMES UNINSURED, TO PROVIDE THAT THE DEPARTMENT MAY AUTHORIZE INSURERS TO UTILIZE ALTERNATIVE METHODS OF PROVIDING NOTICE OF NEW POLICIES WRITTEN AND RENEWALS TO THE DEPARTMENT, TO DELETE THE PROVISION THAT REQUIRES LICENSE PLATES SURRENDERED PURSUANT TO THIS SECTION BE FORWARDED TO THE DEPARTMENT OF REVENUE, AND TO ELIMINATE THE REINSTATEMENT FEE CHARGED TO A PERSON WHO VOLUNTARILY SURRENDERS HIS LICENSE PLATES AND REGISTRATION CERTIFICATES BEFORE THEIR SUSPENSION; BY ADDING SECTION 56-10-46 SO AS TO PROVIDE THAT A PERSON WHO RESPONDS TO THE NOTICE CONTAINED IN SECTION 56-10-40 WHO PURCHASED INSURANCE AFTER RECEIVING THE NOTICE SHALL HAVE HIS MOTOR VEHICLE RECORD NOTED TO INDICATE THAT HE WILL BE SUBJECT TO REGULAR REQUESTS FOR PROOF OF INSURANCE FROM THE MOTOR VEHICLES DIVISION; BY ADDING SECTION 56-10-615 SO AS TO PROVIDE THAT THE MOTOR VEHICLES DIVISION SHALL OBTAIN INFORMATION FROM INSURERS REGARDING CANCELLATIONS OF AUTOMOBILE INSURANCE POLICIES, TO PROVIDE THAT THE DIVISION SHALL REQUEST PROOF OF INSURANCE FROM PERSONS IDENTIFIED BY THE MOTORIST INSURANCE DATABASE, AND TO PROVIDE A PENALTY FOR A PERSON WHO FAILS TO RESPOND TO THE DIVISION; TO AMEND SECTION 38-73-470, RELATING TO THE DISPOSITION OF THE UNINSURED MOTORIST PREMIUM, SO AS TO INCREASE THE FEE AND REVISE THE DISTRIBUTION OF THE FEE; TO REPEAL SECTION 56-10-270, RELATING TO THE OPERATION OF AN UNINSURED MOTOR VEHICLE; AND TO REPEAL SECTION 56-3-220, RELATING TO DEALER SOLD CARDS.

Be it enacted by the General Assembly of the State of South Carolina:

Motorist insurance database program

SECTION 1. Chapter 10, Title 56 of the 1976 Code is amended by adding:

Section 56-10-610. This article may be cited as the 'Motorist Insurance Database Program Act'.

Section 56-10-620. As used in this article, unless the context otherwise requires:

(1) 'Contractor' means designated agent or the party with which the division contracts pursuant to Section 56-10-640.

(2) 'Database' means the motorist insurance database described in Section 56-10-640.

(3) 'Department' means the Department of Public Safety.

(4) 'Division' means the Motor Vehicles Division in the Department of Public Safety.

(5) 'Program' means the motorist insurance database program created in Section 56-10-640.

Section 56-10-630. (A) The General Assembly finds that the purpose of this article is to help reduce the uninsured motorist population in this State and to measure the effectiveness of the motorist insurance database established pursuant to this article.

(B) The General Assembly further recognizes that the information and data required to be disclosed by insurers in creating and maintaining the motorist insurance database is proprietary in nature. Accordingly, the parties handling this information and data must at all times maintain its confidential and proprietary nature.

(C) The motorist insurance database program is created for the purpose of establishing a database to use when verifying compliance with the motor vehicle financial security requirements in this chapter.

Section 56-10-640. (A)(1) The motorist insurance database program shall be administered by the division. Pursuant to the South Carolina Consolidated Procurement Code, the division may contract with a contractor who may provide a system of transmitting data from insurance companies. The division must solicit and receive at least two bids on the contract before awarding the contract.

(2) The department shall convene a working group chaired by the director of the division or his designee for the purpose of facilitating the implementation of the program, assisting in development of regulations, and coordinating a testing phase, and necessary changes identified in this testing phase, as prescribed by the working group. The working group shall consist of five representatives of the insurance industry appointed by the Director of the Department of Insurance. The working group shall also consist of the Director of the Department of Insurance, or his designee, the Director of the Motor Vehicles Division, or his designee, and any contractor. The working group shall issue a report to the Motor Vehicles Division and the Department of Insurance twelve months after the program is implemented to evaluate the program's effectiveness in identifying uninsured motorists. The working group may issue recommendations for database enhancements.

(B) The Motor Vehicles Division shall develop, in a manner prescribed by the department, a system to allow the transmission of data from insurance companies to the division.

(C) The department, with input from the Department of Insurance, shall promulgate regulations for administering and enforcing this article. The regulations shall specify the requirements that are necessary and appropriate for commercial lines of insurance, as defined in Title 38, which shall be developed with input by the Department of Insurance.

(D) The division for a fee prescribed and promulgated by regulation shall make available to insurers by subscription a monthly electronic list of newly-licensed drivers. This list must not be used for marketing, solicitation, or another purpose not specifically enumerated here. It may only be used to provide an additional method to reduce the uninsured motorist population. This monthly list of newly-licensed drivers must show the: name and gender of the driver, address, date of birth, South Carolina driver's license number, and, if available, insurance information provided in the liability certification portion of the application for a driver's license. This information may be used for:

(1) determining if a newly-licensed driver is insured;

(2) assigning a newly-licensed driver to the proper automobile insurance policy for rating purposes; and

(3) ordering a motor vehicle report on a newly-licensed driver.

Section 56-10-650. (A) If the database indicates that a motor vehicle is not insured or if the division receives notification as prescribed by regulation that a vehicle may not be insured, the division shall notify the owner of the motor vehicle that he has forty-five days to provide the division with one of the following, or the owner's license plates will be subject to suspension:

(1) proof of complying coverage in accordance with Section 56-10-10 or 56-10-220, or of self-insurance in accordance with Section 56-9-60; or

(2) proof of exemption from the financial security requirements.

(B) Verification in a manner prescribed by regulation from an insurer or agent verifying that the person had the required motor vehicle insurance coverage on the date specified is considered proof of financial responsibility for purposes of this section.

Section 56-10-660. (A) The division, for a fee as prescribed and promulgated by regulation, shall disclose an individual's reported database information upon request by the following individuals and agencies only:

(1) the individual;

(2) the parent or legal guardian of an individual who is an unemancipated minor;

(3) the legal guardian of an individual who is legally incapacitated;

(4) any person who has power of attorney from the individual;

(5) any person who submits a notarized release from the individual that is dated no more than ninety days before the date the request is made;

(6) any person suffering loss or injury or against whom a claim is made for loss or injury in a motor vehicle accident in which the individual is involved, but only as part of an accident report authorized in Section 56-9-351;

(7) the office of the state auditor, for the purpose of conducting any audit authorized by law;

(8) any state or local government agency investigating, litigating, or enforcing the person's compliance with the financial security requirements; or

(9) persons regulated under Title 38 of the 1976 Code for the purposes of paying or adjudicating claims and preventing fraud or abuse.

(B) The funds collected from this fee described by subsection (A) must be placed by the Comptroller General into a special restricted account to be used by the department to defray expenses of the division.

(C) The State is not liable to any person for gathering, managing, or using information in the database pursuant to this article.

(D) No insurer is liable to any person for performing its duties under this article unless, and to the extent, the insurer commits a wilful and wanton act or omission.

(E) Insurers shall be required to pay only those actual costs attributed to the transmission to or retrieval of their records from the division, pursuant to regulations promulgated by the Department of Insurance. The funds collected from the insurers pursuant to this subsection must be placed by the Comptroller General into a special restricted account to be used by the department to defray expenses of the division.

Section 56-10-670. This article shall not supersede other actions or penalties that may be taken or imposed for violation of the financial security requirements of this chapter."

Collection of data and maintenance of statistics

SECTION 2. Section 56-10-553 of the 1976 Code, as added by Act 154 of 1997, is amended to read:

"Section 56-10-553. The Department of Public Safety must collect data and maintain statistics on the total number of vehicles registered in the State as of June thirtieth of each year, the number of motorists who voluntarily paid the five hundred fifty dollar fee at the time of registration during the fiscal year, the number of motorists who paid the penalty fee after being detected by the Department of Public Safety as being uninsured during the fiscal year, the number of certificates of insurance filed during the fiscal year, the net revenue collections for these fees by the fiscal year, the net funds available in the Uninsured Motorist Fund, and the net funds received from the Department of Insurance from the uninsured motorist fee during the fiscal year.

The Department of Public Safety must provide an annual report to the General Assembly and the Department of Insurance containing the information required in this section."

Proof of insurance and financial responsibility

SECTION 3. Section 56-10-225 of the 1976 Code, as last amended by Act 90 of 2001, is further amended to read:

"Section 56-10-225. (A) A person whose application for registration and licensing of a motor vehicle has been approved by the department must maintain in the motor vehicle at all times proof that the motor vehicle is an insured vehicle in conformity with the laws of this State and Section 56-10-510.

(B) The owner of a motor vehicle must maintain proof of financial responsibility in the motor vehicle at all times, and it must be displayed upon demand of a police officer or any other person duly authorized by law.

(C) A person who fails to maintain the proof of insurance in his motor vehicle as required by subsection (A) is guilty of a misdemeanor and, upon conviction, is subject to the same punishment as provided by law for failure of the person driving or in control of a motor vehicle to carry the vehicle registration card and to display the registration card upon demand. However, a charge of failing to maintain proof that a motor vehicle is insured must be dismissed if the person provides proof to the court that the motor vehicle was insured on the date of the violation. Upon notice of conviction, the department shall suspend the owner's driver's license until satisfactory proof of insurance is provided. If at any time the department determines that the vehicle was without insurance coverage, the owner's registration and driving privileges will be suspended pursuant to Section 56-10-520."

Uninsured motor vehicle fee

SECTION 4. Section 56-10-520 of the 1976 Code, as added by Act 154 of 1997, is amended to read:

"Section 56-10-520. A person who owns an uninsured motor vehicle:

(1) licensed in the State; or

(2) subject to registration in the State;

who operates or permits the operation of that motor vehicle without first having paid to the director the uninsured motor vehicle fee required by Section 56-10-510, to be disposed of as provided by Section 56-10-550, is guilty of a misdemeanor.

A person who is the operator of an uninsured motor vehicle and not the titled owner, who knows that the required fee has not been paid to the director, is guilty of a misdemeanor and, upon conviction, must: for a first offense be fined no less than one hundred dollars and not more than two hundred dollars or imprisoned for thirty days; for a second offense be fined two hundred dollars or imprisoned for thirty days, or both; or for a third or subsequent offense must be imprisoned for not less than forty-five days nor more than six months. Only convictions which occurred within five years, including and immediately preceding the date of the last conviction, constitute prior convictions within the meaning of this section.

The director or his designee, having reason to believe that a motor vehicle is being operated or has been operated on any specified date, may require the owner of such motor vehicle to submit the certificate of insurance provided for by Section 56-10-510. The refusal or neglect of the owner who has not, before the date of operation, paid the uninsured motor vehicle fee required by Section 56-10-510 as to such motor vehicle, to furnish such certificate must be prima facie evidence that the motor vehicle was an uninsured motor vehicle at the time of such operation. A person who presents or causes to be presented to the director a false certificate that a motor vehicle is an insured motor vehicle or false evidence that a motor vehicle sought to be registered is an insured motor vehicle, is guilty of a misdemeanor and, upon conviction, must be fined pursuant to Section 56-10-260.

Abstracts of records of conviction, as defined in this title, of any violation of any of the provisions of this section must be forwarded to the director as prescribed by Section 56-9-330. The director shall suspend the driver's license and all registration certificates and license plates of any titled owner of an uninsured motor vehicle upon receiving notice of a violation of any provisions of this section, and the director shall not thereafter reissue the driver's license and the registration certificates and license plates issued in the name of such person until such person pays the fee applicable to the registration of an uninsured motor vehicle as prescribed in Section 56-10-510 and furnishes proof of future financial responsibility as prescribed by this section. Notice of such suspension shall be made in the form provided for in Section 56-1-465. However, when three years have elapsed from the date proof was required, the director may relieve the person of the requirement of furnishing proof of future financial responsibility. When the suspension results from a conviction for presenting or causing to be presented to the director a false certificate as to whether a motor vehicle is an insured motor vehicle or false evidence that any motor vehicle sought to be registered is insured, then the director shall not thereafter reissue the driver's license and the registration certificates and license plates issued in the name of the person so convicted for a period of one hundred eighty days from the date of the order of suspension, and only then when all other provisions of law have been complied with by the person. The director shall suspend the driver's license of any person who is the operator but not the titled owner of a motor vehicle upon receiving notice of a violation of any provisions of this section, and he shall not thereafter reissue the driver's license until thirty days from the date of the order of suspension."

Notification of lapse or termination of automobile insurance

SECTION 5. Section 56-10-40 of the 1976 Code, as last amended by Act 459 of 1996, is further amended to read:

"Section 56-10-40. Every insurer writing automobile liability insurance in this State and every provider of other security approved and accepted by the director or his designee in lieu of such insurance shall notify the department in a manner prescribed by regulation of the lapse or termination of any such insurance or security during the immediately preceding month as prescribed by regulation. This notification must be made in a manner prescribed by the working group.

Upon receipt of any such notice the department shall make a reasonable effort to notify the person that his certificate of registration has been suspended and shall recover the certificate from such person and the motor vehicle plate from the vehicle concerned."

Upon loss of insurance insured must obtain new insurance

SECTION 6. Section 56-10-240 of the 1976 Code, as last amended by Act 82 of 2001, is further amended to read:

"Section 56-10-240. (A) If, during the period for which it is licensed, a motor vehicle is or becomes an uninsured motor vehicle, then the vehicle owner immediately shall obtain insurance on the vehicle or within five days after the effective date of cancellation or expiration of his liability insurance policy surrender the motor vehicle license plate and registration certificate issued for the motor vehicle. (B) The department, in its discretion, may authorize insurers to utilize alternative methods of providing notice of cancellation, refusal to renew, new policies written, and renewals to the department. The department may not reissue a registration certificate and license plate for that vehicle until satisfactory evidence has been filed by the owner or by the insurer who gave the cancellation or refusal to renew notice to the department that the vehicle is insured. Upon receiving information to the effect that a policy is canceled or otherwise terminated on a motor vehicle registered in South Carolina, the department shall suspend the license plate and registration certificate and shall initiate action as required within fifteen days of the notice of cancellation to pick up the license plate and registration certificate. A person who has had his license plate and registration certificate suspended by the department, but who at the time of suspension possesses liability insurance coverage sufficient to meet the financial responsibility requirements as set forth in this chapter, has the right to appeal the suspension immediately to the Director of the Department of Insurance. If the Director of the Department of Insurance determines that the person has sufficient liability insurance coverage, he shall notify the department and the suspension is voided immediately. The department shall give notice by first class mail of the cancellation or suspension of registration privileges to the vehicle owner at his last known address.

(C) If the vehicle owner unlawfully refuses to surrender the suspended items as required in this article, the department through its designated agents or by request to a county or municipal law enforcement agency shall take possession of the suspended license plates and registration certificates and may not reissue the registration until proper proof of liability insurance coverage is provided and until the owner has paid a reinstatement fee of two hundred dollars. A person who voluntarily surrenders his license plates and registration certificates before their suspension shall not be charged a reinstatement fee.

(D) A person wilfully failing to return his motor vehicle license plates and registration certificates as required in this section is guilty of a misdemeanor and, upon conviction, must be punished as follows:

(1) for a first offense fined not less than one hundred dollars nor more than two hundred dollars or imprisoned for thirty days;

(2) for a second offense fined two hundred dollars or imprisoned for thirty days, or both;

(3) for a third and subsequent offense imprisoned for not less than forty-five days nor more than six months.

(E) Only convictions which occurred within ten years including and immediately preceding the date of the last conviction constitute prior convictions within the meaning of this section."

Regular requests for proof of insurance

SECTION 7. The 1976 Code is amended by adding:

"Section 56-10-46. A person responding to the notice contained in Section 56-10-40 who purchased insurance after receiving the notice shall have his motor vehicle record noted to indicate that he will be subject to regular requests for proof of insurance from the Motor Vehicles Division. The person shall be required to provide proof of coverage as prescribed by regulation every seven months for a period of three years."

Cancellations of automobile insurance policies

SECTION 8. The 1976 Code is amended by adding:

"Section 56-10-615. The Motor Vehicles Division shall obtain information from insurers regarding cancellations of automobile insurance policies. The division shall request proof of insurance from persons identified by the Motorist Insurance Database. A person who fails to respond to the division must be penalized as provided in Article 5 of this chapter."

Uninsured motorist coverage premium

SECTION 9. Section 38-73-470 of the 1976 Code is amended to read:

"Section 38-73-470. Two dollars of the yearly premium for uninsured motorist coverage is directed to be paid to the South Carolina Department of Public Safety to be placed on deposit with the State Treasurer in the 'Uninsured Enforcement Fund', payable on a quarterly basis, to provide for the costs of enforcing and administering the provisions of Article 3, Chapter 10, Title 56. Of the two dollars collected, eighty cents must be distributed to the South Carolina Highway Patrol and one dollar twenty cents must be distributed to the Motor Vehicles Division. Interest earned by the 'Uninsured Fund' must be retained by that fund. There is no requirement for an insurer or an agent to offer underinsured motorist coverage at limits less than the statutorily required bodily injury or property damage limits."

Repeal

SECTION 10. Section 56-10-270 of the 1976 Code is repealed.

Repeal

SECTION 11. Section 56-3-220 of the 1976 Code is repealed.

Time effective

SECTION 12. This act takes effect July 1, 2002; provided, however, that Section 56-10-650 and Sections 5, 6, and 9 are effective one hundred eighty days after the latter of certification by the department to the President Pro Tempore of the Senate and the Speaker of the House of Representatives that the program has been implemented and is fully prepared to accept data transmitted by the insurers or publication of final regulations by the department.

Ratified the 30th day of May, 2002.

Approved the 4th day of June, 2002.