NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

The LFC is only preparing FIRs on bills referred to the Senate Finance Committee, the Senate Ways and Means Committee, the House Appropriations and Finance Committee and the House Taxation and Revenue Committee. The chief clerks are responsible for preparing and issuing all other bill analyses.

Only the most recent FIR version, excluding attachments, is available on the Internet/Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Room 416 of the State Capitol Building.

(Parenthesis ( ) Indicate Expenditure Decreases)

SOURCES OF INFORMATION

Public Regulation Commission (PRC)

Attorney General

SUMMARY

Synopsis of Bill

The bill would prohibit an uninsured motorist from suing another driver who is in compliance with the Mandatory Financial Responsibility Act, unless the other at-fault driver is committing a felony; is driving under the influence of alcohol or drugs; or is guilty of intentional misconduct. The at-fault driver's automobile insurance company would also be prohibited from paying assessed damages unless these circumstances apply.

OTHER SUBSTANTIVE ISSUES

The PRC's Insurance Division indicates that in the short-run, the bill could result in a 30 to 60 percent reduction in bodily injury and property damage claims which could result in a 10 to 40 percent drop in insurance premium claims. However, in the long-run, the effects of this bill are uncertain. The PRC also indicates the bill could be failing to consider that the current law is inherently unfair by placing an undue burden on the poor.

The bill does not contain an appeal clause for a motorist who may be uninsured due to a clerical error or some other unforeseen circumstance.

RAE/gm