SB 488

Under current law, a motor vehicle liability insurance policy or bond, offered as

proof of financial responsibility to avoid the deposit of security after an accident or

following entry of judgment arising from an accident, must generally be issued by an

insurer authorized to do an automobile liability or surety business in this state.

However, if the vehicle involved in the accident was not registered in this state when

the most recent policy or bond period commenced or the judgment is entered against

a nonresident, the policy or bond covering the vehicle is acceptable proof of financial

responsibility, even if it is not issued by an insurer authorized to do an automobile

liability or surety business in this state, if it meets certain liability limits and the

insurer that issued the policy or bond executes a power of attorney authorizing the

Department of Transportation (DOT) to accept service of process in any action upon

the policy or bond arising out of the accident or another accident in this state.

This bill eliminates the requirement that, for a policy or bond issued by an

insurer not authorized to do an automobile liability or surety business in this state

to be acceptable proof of financial responsibility, the insurer execute a power of

attorney authorizing DOT to accept service of process. The bill does not affect current

law provisions providing that a nonresident's operation of a motor vehicle on the

state's highways constitutes an authorization for DOT to receive service of process

for the nonresident or his or her personal representative in any action relating to

damage resulting from the vehicle operation.

For further information, see the

Notes

provided by the Law Revision

Committee of the Joint Legislative Council.