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eSlips Advisory Report: E-Delivery of Motor Vehicle Insurance Cards Fall 2015
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E-DELIVERY OF MOTOR VEHICLE INSURANCE LIABILITY CARDS By Daniel Fabiano, Fasken Martineau DuMoulin LLP 1. Background Canadian motor vehicle owners are required to insure their vehicle for third party liability and basic accident benefits coverage. Provincial and territorial insurance regulators prescribe the document that is to be used to prove this coverage. That document is often referred to as a motor vehicle liability insurance card or a financial responsibility card. In most Canadian provinces and all Canadian territories, the “pink card” is the required form of insurance card. The pink card arose out of a decision of the Council of Canadian Insurance Regulators. 1 In the early 1960s, the Council decided that a standard form insurance card would be in the interest of all provinces. A standard form would allow a province’s police officers to more easily identify valid insurance cards for drivers from other provinces. As a result, the Council adopted the familiar pink card. 2 The pink card is not used in Quebec, British Columbia, Manitoba and Saskatchewan.
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In the western provinces, residents receive the required minimum motor vehicle insurance coverage through a provincial crown corporation rather than private sector insurers. Under this regime, there is no pink card and motor vehicle registration and liability insurance are combined.
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The pink card is also not used in Quebec. Although Quebec insurance providers must provide an insurance certificate that contains prescribed content (i.e., by section 97 of the Automobile Insurance Act (Quebec)), there is no mandatory colour for this document. More significantly, this document can be sent by e-mail. In this regard, Quebec is the first jurisdiction in Canada to embrace a modern approach.
Our understanding is based on discussions with a representative of the Alberta Ministry of Treasury Board and Finance, and confirmed by discussions with a representative of the Financial Services Commission of Ontario. Despite extensive efforts, specific Council or regulator documents from the 1960s (wherein the colour and size requirements were set out and formally approved) have proven elusive. To date, only oblique references to an approved standard form appear in the bulletins, gazettes and similar documents issued by regulators and provinces. For example, see the comments of the Ontario Superintendent of Financial Services (Interim) in the attached jurisdictional summary.
-3 2. Original, Paper Pink Card In each of the pink card provinces and territories, the basic requirement for an insurance card is set out in legislation. However, that legislation defers to the applicable provincial or territorial regulator to determine the form of the card. At present, most of the regulators of the pink card provinces and territories do not clearly specify in their official bulletins or notices that an original paper card is the exclusive format (only Alberta is clear on this point, requiring paper cards). However, representatives of these regulators confirmed that the original paper card is nonetheless required. Many consumers are unaware that a photocopy of an insurance card is not valid evidence of insurance coverage in these jurisdictions. Not having the original paper pink card in the vehicle is technically an offence, although some police officers exercise discretion in enforcing that requirement. Note, however, that facilitating change to this more than 50-year-old regime lies largely with provincial regulators, without the need for statutory amendment. The relevant legislation in each province and territory using the pink card does not itself expressly require that the insurance card be in paper form, and the legislation defers to the regulator to set the form of the card. In our view, provincial and territorial insurance regulators could therefore permit the electronic delivery of an insurance card, and beyond that, could permit the use of electronic images of insurance cards to suffice. 3. Issue of Fraud Over the past 10 years, modernization of the pink card regime has been proposed from time to time in the course of various reviews of automobile insurance regimes. In Ontario, the Superintendent’s 2009 Report on the Five Year Review of Automobile Insurance to the Minister of Finance3, the Superintendent indicated that the “primary concern regarding electronic commerce is the production of fraudulent liability cards”. The report also noted that “fraudulent paper liability cards currently exist and that technological solutions may exist to address these concerns.” However, citing fraud as a basis to rely on a paper card, seems incongruous with current technology. Specifically:
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Technological solutions exist which can securely deliver authentic insurance cards by electronic means.
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Bad actors can create or use a false insurance card regardless of whether the insurance card is in paper or electronic form, and without any appreciable difference in difficulty as between a paper or electronic form.
https://www.fsco.gov.on.ca/en/auto/5yr-review/Documents/FiveYearReviewReport.pdf [March 31, 2009].
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It is relatively easy for bad actors to make use of an invalid insurance card (e.g., one for which the underlying insurance has been cancelled) regardless of its form. Police officers inevitably accept paper insurance cards that appear valid and unexpired.
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There is no technological solution that police officers can use in the field to verify current proof of insurance coverage. At best, officers may be able to access provincial databases that indicate whether the vehicle was insured at the time of vehicle registration or renewal. This stale information is not particularly helpful in detecting fraudulent paper liability cards.
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All police agencies consulted in connection with this advisory report 4 suggested that if an officer doubted proof of valid insurance, a call to the insurance company would be the easiest way to verify the claim (an approach that seems to be taken regardless of whether the insurance is Canadian or U.S.).
Given this, it is difficult to see how fraud prevention can continue to justify the original paper card requirement to the exclusion of an electronic card. 4. The U.S. Experience The Canadian experience with respect to the pink cards is in sharp contrast with the regime now prevailing in the United States. According to the Property Casualty Insurers Association of America (PCIAA), 43 U.S. states have enacted e-card legislation which permits some form of electronic proof of motor vehicle insurance coverage 5 – permitting electronic delivery of insurance cards and, in many cases, also permitting drivers to use an electronic image (e.g., on a smartphone screen) to evidence coverage. The PCIAA notes the enactment of e-card legislation as a recent phenomenon: “In 2011, no states allowed drivers to use their cell phone to show proof of insurance in a traffic stop and today more than three-fourths of the states have enacted laws or adopted regulations [to facilitate electronic proof of insurance coverage].” 6 While the decision of many U.S. states to adopt e-card legislation has been well received, some concerns have been raised with respect to privacy and liability. On the issue of privacy, it is common for individuals to store a variety of personal information on their mobile devices. Concerns have been raised regarding a police officer’s ability to access such information while that officer is in possession of the mobile device in the course of verifying the proof of insurance. To address this concern, many U.S. states have included provisions in their e-card legislation that limit a police officer’s ability to access information stored on a mobile device other than the information contained on the e-card.7 4
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The Royal Canadian Mounted Police, the Ontario Provincial Police, the Toronto City Police, and the Calgary Police. http://www.pciaa.net/pciwebsite/cms/content/viewpage?sitePageId=41443 [“E-Card and Anti-Fraud Measures Become Law in New Jersey”, May 11, 2015] http://www.pciaa.net/industry-issues/e-commerce [“Policymakers Take Positive Steps in 2015 to Modernize Insurance Laws”] For example, New Jersey included the following provision in its e-card legislation: “The use of a cellular telephone, tablet, computer, or any other electronic device to display proof of insurance does not constitute
-5 With respect to liability, concerns were raised with respect to a peace officer’s liability should a mobile device be damaged in the process of verifying proof of insurance. To address this concern, it appears that many U.S. states 8 have included provisions in their e-card amendments that shield a peace officer from such liability. 9 Some U.S. states have attempted to strike a balance by qualifying this immunity: the immunity from liability for damage exists only where the police officer exercises due care when handling the device 10 or where the police officer has taken some intentional or reckless action that results in damage. 11 Taking the issue of liability one step further, the Texas Legislature chose to remove doubt as to whether a telecommunications carrier is liable in the event that a wireless communication device fails to display the required information to provide proof of insurance, rendering carriers immune if the device is not able to remotely access the information. 12 Clearly, the U.S. experience is instructive on the degree to which the Canadian provincial and territorial regimes can be modernized – whether to simply permit electronic delivery of paper cards, or to go the next step and permit the use of images of those cards on devices. For an example of an amendment that allows both approaches, and which accounts for many of the concerns discussed above, see the excerpt from the amendment to the Ohio Revised Code, as reproduced in Appendix B. 5. Moving Beyond Paper in Canada While the pink card regime has existed in Canada for decades, it is clear that this paper -based system needs to be modernized. Although many legal barriers to e-commerce have been eliminated through provincial e-commerce statutes, this is one example of a lingering requirement for traditional paper documents that continues to hamper the insurance sector. As consumers and other industries rely more heavily on digital means to conduct their affairs, it is critical that the insurance sector be able to adapt to these changes.
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consent for a police officer or judge to access any other contents on the device.” U.S., A. 3905, An Act concerning motor vehicle insurance identification cards and amending R.S.39:3-29, 216th Leg., Reg. Sess.,NJ, 2014 (enacted). Not all U.S. states that have enacted e-card legislation have provided this liability shield. For example, the amendment to the Maine Revised Statutes (see below) does not include such a provision. For example, Illinois included the following provision: “Any law enforcement officer, court, or officer of the court presented with the device shall be immune from any liability resulting from damage to the mobile electronic device.” U.S., S.B. 1775, An Act concerning transportation, 98th Gen. Assem., Reg Sess., Ill., 2013 (enacted). U.S., S.B. 255, An Act to amend sections 4503.20, 4509.101, 4509.102, 4509.103, and 4509.45 of the Revised Code to permit a person to present proof of financial responsibility to the Registrar of Motor Vehicles, a peace officer, a traffic violations bureau, or a court through use of an electronic wireless communications device, 130th Gen. Assem., Reg. Sess., Ohio, 2014 (enacted). U.S., H.F. 307, An Act relating to transportation; commerce; providing for proof of insurance in electronic format; amending Minnesota Statutes 2014, section 169.791, subdivision 1, 2, 89th Leg., Reg. Sess., Minn., 2015 (enacted). U.S., S.B. 181, An Act relating to verification of motor vehicle financial responsibility information, 83rd Leg., Reg. Sess., Tex., 2013 (enacted).
-6 Of particular interest is a 2015 study conducted by Forrester Research, Inc. which indicates that over one third of Canadians interested in digital wallets would store identification cards, which could include proof of insurance, in such a wallet. 13 In order to meet the demands of changing consumer preferences, and for the insurance sector to keep pace with technological advancements, it is critical that regulatory bodies become more permissive with respect to ecommerce solutions. In advocating for change, it is important to note that change can be achieved by Canadian provincial and territorial regulators, and without the need for statutory amendment. This is because the relevant legislation does not itself expressly require that the insurance card be in paper form, and the legislation defers to each provincial and territorial regulator’s office to set the form of the card. Therefore, each regulator can extend significant benefits to consumers, insurers and brokers merely by issuing a bulletin that permits one or both of the following to serve as proof of coverage: •
A printed copy of an insurance card sent via email or similar electronic means (preferably in black and white, without colour or paper stock requirements); and/or
• An electronic copy accessible using a smart phone or similar device for display as needed (e.g., at a traffic stop, allowing a police officer to view a smart phone screen display) – this would remove the need for insureds to print a paper copy of the insurance card. Clearly, the rapid advance of e-commerce will eventually encompass proof of motor vehicle insurance coverage by electronic means.
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Source: 2015 market research conducted by Forrester Research, Inc., sampling 3051 Canadians, aged 18 and older.
Appendix A - Jurisdictional Summary Province
Regulation Traffic Safety Act, RSA 2000, c T6, at s. 167 Insurance Act, RSA 2000, c I-3, s. 822
Regulator Alberta Treasury Board and Finance
Comments Bulletin Number 01-2015, “Approved Form of Financial Responsibility Card [Pink Card]”, dated May 201514 states (emphasis added): “Consistent with other jurisdictions in Canada, the Superintendent has approved the form for the [financial responsibility card (FRC)]. Except as provided below in the section titled “TEMPORARY FRC”, the FRC:
Alberta
1. Must contain at least the following information: a) Insurer’s licensed legal name prominently displayed b) Policy number c) Insured’s name d) Insured vehicle make, model, Vehicle Identification Number (VIN) e) Effective and Expiry dates f) The words “Motor Vehicle Liability Insurance Card Canada Inter-Province Applicable Within Canada and the United States of America”; 2. Must be an original document in hard copy on pink paper, with the provincial and territorial shields in white in the background (see Appendix 1), and 3. Is not valid unless the referenced automobile insurance policy is in force.”
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http://www.finance.alberta.ca/publications/insurance/Superintendent-of-Insurance-Bulletin-01-2015.pdf
Province
Regulation
Regulator
Motor Vehicle Act, RSNB 1973, c. M-17, at ss. 28, 279 and 291
Registrar of Motor Vehicles
Automobile Insurance Act, c. A-22, at s. 4
Service NL
Motor Vehicle Act, RS c. 293, at ss. 204 and 206
Registrar of Motor Vehicles
New Brunswick
Newfoundland
Nova Scotia
Comments The Motor Vehicle Act requires the insurance card to be the one issued by the insurer and in the form approved by the Registrar. Also, that Act expressly permits a photocopy of a vehicle registration to be presented to a peace officer, but does not include a similar permission in relation to the insurance card. As such, it would be reasonable to read the requirement relating to the insurance card as requiring the original card and excluding a copy (electronic or otherwise). Also, given the practices in other provinces, and the Alberta bulletin referenced above, it would be reasonable to interpret the requirement to involve the original paper insurance card and not a copy or electronic version. The legislation speaks to a “card” being issued to the insured by the insurer in the form approved by the Superintendent of Insurance. Given the context, the practices in other provinces, and the Alberta bulletin referenced above, it would be reasonable to interpret the requirement to involve the original paper insurance card and not a copy or electronic version. The legislation speaks to a “card” being issued to the insured by the insurer in the form approved by the Registrar. The legislation also speaks to additional card, being a copy of the original card, for each person who commonly drives the insured vehicle. Given the context, the practices in other provinces, the Alberta bulletin referenced above, and the fact that the legislation implies an “original” card from which copies are made, it would be reasonable to interpret the requirement to involve the original paper insurance card and not a copy or electronic version.
Province
Regulation
Regulator
Northwest Territories
Insurance Act, RSNWT 1988, c I-4, at s. 125(8) Insurance Act, RSNWT (Nu) 1988, c I-4, at s. 125(8) Compulsory Automobile Insurance Act, RSO 1990, c. C25, at s. 3
Finance - Government of the Northwest Territories Finance - Government of Nunavut Financial Services Commission of Ontario
Nunavut
Ontario
Comments Same general approach as Newfoundland. Same general approach as Newfoundland. The Financial Services Commission of Ontario has released three bulletins since 1993 with respect to the approved form of the insurance card. The 1993 bulletin states that the 1993 amendments to the content of the card do not affect the colour (pink) and the size. Commission representatives were unable to identify the original document setting out colour and size requirements. Brian Mills, CEO and Superintendent of Financial Services (Interim) on May 6, 2015: “Bulletin No. A-18/93 states that the colour of the card is pink and that the size of the card remains the same. Originally, the size of the card was designed to fit a standard wallet. It also closely matched the size of the vehicle permit issued by the Ministry of Transportation as well as the driver’s licence at the time, allowing for the documents to be kept together. While the size of the card is not explicitly stated in any Bulletins, the most important requirement of the card is that it must contain the required text along with the data elements shown for the specific vehicle and insurance policy.� Also, section 3 of the Compulsory Automobile Insurance Act states: (3)(1) An operator of a motor vehicle on a highway shall have in the motor vehicle at all times, (a) an insurance card for the motor vehicle, or
Province
Regulation
Regulator
Comments (b) an insurance card evidencing that the operator is insured under a contract of automobile insurance, And the operator shall surrender the insurance card for reasonable inspection upon the demand of a police officer. The term “insurance card” is defined to mean “(a) a Motor Vehicle Liability Insurance Card in the form approved by the Superintendent”.
Prince Edward Island
Insurance Act, c. I-4, at s. 216
Automobile Insurance Act, c. A-25, at s. 97
The Department of Environment, Labour and Justice Autorité des marchés financiers
Quebec
Yukon
Insurance Act, RSY 2002, c. 119, at Professional Licensing & s. 132(8) Regulatory Affairs under the Department of Community Affairs
Given the context, the practices in other provinces, and the Alberta bulletin above, it would be reasonable to interpret the requirement to involve the original paper insurance card and not a copy or electronic version. Same general approach as Newfoundland.
The Automobile Insurance Act does not require certificates of insurance to be in a form approved by the Superintendent of Insurance. Instead, section 97 of the Act sets out the content that is required. According to representatives of the Autorité des marchés financiers (and confirmed by a representative at the Groupement des assureurs automobiles) the certificate can be sent via email (typically only upon the insured’s request) or mail, and there is no mandatory colour. Same general approach as Newfoundland.
Appendix B - Ohio Revised Code The underlined provisions reflect the amendments to the Ohio Revised Code 15: Sec. 4509.101. (G)(1)(a) The registrar, court, traffic violations bureau, or peace officer may require proof of financial responsibility to be demonstrated by use of a standard form prescribed by the registrar. If the use of a standard form is not required, a person may demonstrate proof of financial responsibility under this section by presenting to the traffic violations bureau, court, registrar, or peace officer any of the following documents or a copy of the documents: (i) A financial responsibility identification card as provided in section 4509.103 of the Revised Code; (b) A person also may present proof of financial responsibility under this section to the traffic violations bureau, court, registrar, or peace officer through use of an electronic wireless communications device as specified under section 4509.103 of the Revised Code. [‌]
(N)(1) When a person utilizes an electronic wireless communications device to present proof of financial responsibility, only the evidence of financial responsibility displayed on the device shall be viewed by the registrar, peace officer, employee or official of the traffic violations bureau, or the court. No other content of the device shall be viewed for purposes of obtaining proof of financial responsibility. (2) When a person provides an electronic wireless communications device to the registrar, a peace officer, an employee or official of a traffic violations bureau, or the court, the person assumes the risk of any resulting damage to the device unless the registrar, peace officer, employee, or official, or court personnel purposely, knowingly, or recklessly commits an action that results in damage to the device. Sec. 4509.103. (A) As used in this section and sections 4509.101 and 4509.102 of the Revised Code, "electronic wireless communications device" includes any of the following: (1) A wireless telephone, including a cellular telephone; (2) A personal digital assistant; (3) A computer, including a laptop computer, a netbook computer, and a tablet computer; (4) Any other substantially similar wireless device that is designed or used to communicate and displays text or images. 15
U.S., H.F. 307, An Act relating to transportation; commerce; providing for proof of insurance in electronic format; amending Minnesota Statutes 2014, section 169.791, subdivision 1, 2, 89th Leg., Reg. Sess., Minn., 2015 (enacted).