JEFF AMY, Associated Press
JACKSON — A contractor projects that a system to instantly verify whether Mississippians have auto insurance would lead to fines of more than $150 million a year being collected over the program's first three years
The computer system was supposed to launch July 1, but was delayed by a vendor selection dispute. Now, it isn't scheduled to roll out statewide until early 2014.
The system is meant to allow county tax collectors and law enforcement officers to check whether someone has auto insurance. But it's also supposed to eventually generate automatic tickets to anyone whom records indicate hasn't bought a policy.
That wrinkle isn't present in some other states that have moved to online insurance verification.
Motorists are required to carry auto insurance under Mississippi state law. But, a 2009 study by the Insurance Research Council estimated that 28 percent of Mississippi drivers are uninsured, the most in the nation. That's double the estimated nationwide uninsured rate of 14 percent.
Uninsured motorists are a problem because those who do buy coverage end up paying extra premiums to cover damage caused by those who go without.
Right now, law enforcement officers have to rely on paper cards distributed by insurance companies to determine whether someone has coverage. But that system is easily fooled by someone buying six months of insurance and cancelling the policy after receiving a card. There are also isolated cases of people forging insurance cards, according to prosecutors.
The idea behind the verification system is that insurers would send in records of who has a policy at any moment, allowing police officers to check a motorist's status at the traffic stop. The 2012 law that set up the system also mandates that county tax collectors use the system and refuse to sell a license plate to anyone who is uninsured.
So far, fewer than 10 states have set up online verification systems. Texas, which has been running one since 2008, says it has cut the number of uninsured motorists, but not eliminated them. In late 2009, the state couldn't match insurance to registrations for 22 percent of drivers. Texas Insurance Department spokesman Jerry Hagins said that initial number may have been inflated by bad data. Now it's down to about 14 percent.
"We do feel like we've made progress," Hagins said.
In Texas, as in Mississippi, the system sends letters to people who appear to be uninsured. But Hagins said Texas doesn't automatically proceed to citations if people don't respond.
That's the plan in Mississippi, though, said Department of Public Safety Deputy Administrator Ken Magee. He said if people don't buy insurance or send in proof that they are already insured, they would later get a citation.
"If they still aren't in compliance, then a fine would be issued," Magee said.
Uninsured motorists would also be cited during traffic stops.
In a Jan. 7 award letter, the Mississippi Department if Information Technology Services said the winning contractor projects the state will net revenue of $464.9 million over three years, after expenses to run the computer system and send out mailings. DPS spokesman Warren Strain said Validati, a unit of the Pasco Group of Hudson, Ohio, would make 2 cents a month for each of the roughly 2.5 million registered vehicles covered under the law to run the computer system, which works out to about $600,000 a year. The law says the company can also collect fees for generating and mailing letters to people the system believes are uninsured.
It's unclear how many letters will be mailed, but if Validati's revenue projections hold true, it will be a large number. The new law calls for fines of $300 for a first offense, followed by a fine of $400 the second time and $500 each time thereafter. That seems to project between 300,000 and 500,000 tickets a year will result in paid fines.
Mississippi's law envisions a six-month testing period, which Magee said is scheduled to begin Oct. 20. That would be followed by a statewide rollout in early 2014.
Magee said he believed the number of citations would fall as more people got insurance.
The fine collections and number of tickets each appear to be a huge jump over current levels. In 2011, Mississippi officials wrote 47,689 uninsured motorist citations, with 18 percent dismissed or found not guilty, according to answers ITS provided to vendor questions. Courts collected $9.4 million in fines, with the average fine running about $290.
It's not clear how Validati arrived at its figures. The company won an April order from Hinds County Chancery Judge William Singletary sealing its entire proposal, including the state-provided revenue projection form, after a competitor filed a public records request to examine the proposal. Attorney Quentin Whitwell, also a Republican city councilman in Jackson, wrote in a court filing on behalf of competitor HDI Solutions that Validati's victory "was based upon bad information and false assumptions."
"That is just what it is, a projection," Magee said of Validati's bottom-line revenue figure.
The law instructs DPS to issue rules through the state administrative procedures act to govern the process. The public would get a chance to comment during that rule-making process, and even force a public hearing, but DPS has yet to issue its proposed guidelines.
"Who will assess the fine, how that will be assessed, all that will be determined," Magee said.