Motor Vehicle Records (MVRs) are comprehensive reports, often utilized by employers and insurance companies, that contain a wealth of information about an individual’s driving history. But few topics evoke as much confusion and scrutiny as MVRs within the insurance landscape. How should insurers use them? What’s deemed permissible use and what’s off limits?
We recently sat down with John Diana, SambaSafety’s General Counsel and Chief Compliance Officer, to chat about all things MVR. In his role, John directs SambaSafety’s legal affairs and leads the government relations function, working closely with clients. He brings more than 16 years of experience with high-tech legal services, focused on encouraging a culture of compliance while managing regulatory organization-wide compliance issues.
Let’s dive into the intricacies of MVRs with John, exploring their significance, legal framework and implications for insurers looking to make the most of this valuable information source.
Q: There seems to be somewhat of a gray area for insurers when it comes to understanding how to use an MVR. Can you help us understand what exactly constitutes a consumer report, and if an MVR meets this standard?
John: The Fair Credit Reporting Act (FCRA) and consumer reports had their origins in the 1970’s with credit agencies. Think of it as almost like a Bill of Rights for consumers, right? The law has a broad definition of a “consumer report” because it governs how to maneuver when you are providing any information that bears on somebody’s character and eligibility for things like insurance, employment, renting an apartment, getting a loan, etc. Since MVRs are used for a some of these purposes they are, indeed, consumer reports that are governed by the FCRA.
Part of my role at SambaSafety is to ensure that we have full visibility into the accuracy and timeliness of records and to ensure full compliance for SambaSafety and its customers.
Q: How do MVR permissible purposes under the DPPA apply to insurers and employers differently? Are there any nuances that insurers should be aware of?
John: I will say there’s one important nuance for insurers and I think it’s important to really differentiate employment and insurance when it comes to using MVRs.
Employers oftentimes will use MVRs as part of their safety program. This can include ordering a report for pre-hire background checks and checking license status or driving activity throughout employment. Under the DPPA and FCRA, employers are required to get prior authorization from an employee or candidate for hire before ordering an MVR.
Alternatively, insurance agents and carriers will often use MVRs to underwrite new or renewal business. Prior consumer authorization is not required for insurance use cases like underwriting or claims investigation.
SambaSafety created an MVR 101 guide for employers. It covers best practices for employers using MVRs in their safety program, how to read an MVR and state-to-state nuances. This is also a great resource for insurers and agents to reference and share with their commercial policyholders when questions come up about the employment side.
Download Free Guide: MVRs For Employers
Q: What if there’s inaccurate information in the MVR?
John: Well, the FCRA requires that we accept disputes and adjudicate them in 30 days. We have an entire section on our website to support our clients in understanding the compliance requirements for MVRs. Errors are extremely rare but they can occur at the state and we work diligently with our state partners when these occur.
Q: Any closing remarks on using MVRs?
John: The law makes sense. Just to put it in perspective, the information in an MVR can affect insurance premiums or an individual’s ability to get a job, so it makes sense that these fundamental principles are in place so you can’t give these reports for the wrong reason. For example, I couldn’t give them to a dating site or market them to consumers. It’s personal, sensitive information. I have to have a good reason to be providing these reports.
Discover Helpful MVR Resources to Share with Your Policyholders
John’s deep experience with the intricacies of MVRs and the laws that govern them has emphasized the importance of managing the use of these reports with thoughtful consideration.
As a Consumer Reporting Agency (CRA), keeping our customers informed and advocating for consumer rights is essential to our business. SambaSafety is one of the largest providers of MVRs, delivering over 50 million reports annually. We offer insurers and their policyholders solutions to assess and mitigate driving risk, from a point-in-time MVR to continuous MVR monitoring and training.
To learn more about how to read an MVR and best practices for employers, download our free guide below.
