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SB 1667

Motor Vehicles - As introduced, increases from $25 to $500 the coverage failure fee imposed by the department of revenue for the first failure to comply with the James Lee Atwood Jr. Law; increases that fee to $1,500 and requires registration be suspended or revoked for a second or subsequent failure to comply; bars a plaintiff from recovering noneconomic damages from a defendant arising out of the use of a vehicle if the plaintiff was not in compliance with the financial responsibility law; makes other related revisions. - Amends TCA Title 29; Title 55 and Title 56.

114th Regular Session (2025-2026)

Tennessee SB 1667/HB 1690 tightens proof of financial responsibility at vehicle registration/renewal, raises penalties for noncompliance, and caps certain noneconomic damages.

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Bill Summary · SB 1667

Summary of SB 1667 / HB 1690 (Tennessee, 114th General Assembly)

Aimed at strengthening financial responsibility verification for motor vehicles, increasing penalties for noncompliance, and adjusting noneconomic damages in related civil actions. The bill would also require data reporting by insurers and publicizing changes to the law.

1) Purpose and Intent

  • Improve enforcement of the Financial Responsibility Law (Tenn. Code Title 55, Chapter 12) by tightening proof of financial responsibility at registration and renewal.
  • Increase fees tied to coverage noncompliance to bolster administration, enforcement, and the Uninsured Motorist Fund.
  • Introduce a potential noneconomic-damages cap related to cases involving vehicles not in compliance with financial responsibility requirements.
  • Create data-reporting requirements for insurers and publicize the changes to the James Lee Atwood Jr. Law.
  • Establish transitional and implementation timelines, with certain sections taking effect July 1, 2027 (and some later dates).

2) Key Provisions and Changes

  • Registration Requirements and Proof of Financial Responsibility

    • Initial registration cannot be processed unless proof of financial responsibility is provided (insurance or a DOR-issued certificate showing deposits/bonds or self-insurance).
    • Proof can be in paper or electronic form (including electronic display on mobile devices).
    • A notice to vehicle owners/operators about the requirement to carry financial responsibility accompanies all initial and renewal registrations.
    • The section on initial issuance of registration expires June 30, 2029.

  • Documentation and Verification

    • County clerks must verify proof of financial responsibility via the Electronic Insurance Verification System (EIVS) for renewal in certain cases.
    • Insurers must use the Insurance Industry Committee on Motor Vehicle Administration (IICMVA) model for reporting and must provide a weekly book of business to DOR (including VIN, insurer NAIC code, policy number, and effective date).

  • Fees for Coverage Failure

    • Initial coverage failure fee increases from $25 to $500 (with allocations: $200 to county clerks, $50 to DOS, remainder to the Uninsured Motorist Identification Fund; 20% to county clerks for verification program administration).
    • Continued coverage failure fee increases from $100 to $1,000 (allocations: $400 to county clerks, $100 to DOS, remainder to the Fund; 20% to clerks for verification program administration).
    • A new $1,500 repeated coverage failure fee if a registrant receives a second or subsequent notice within three years of the first notice, with allocations: $600 to county clerks, $150 to DOS, remainder to the Fund.
    • If a vehicle remains noncompliant after multiple notices within three years, the department must suspend or revoke the vehicle’s registration and issue notices about reinstatement.

  • Repeats and Notices

    • If a vehicle fails to provide satisfactory proof after a first notice, the repeated coverage failure fee applies, with a pathway to suspension/revocation of registration and instructions for reinstatement.

  • Economic and Noneconomic Damages in Civil Actions

    • Adds a noneconomic damages cap of $375,000 for certain civil actions arising from motor vehicle injuries where the plaintiff was not in compliance with financial responsibility requirements, subject to certain conditions:
    • Plaintiff must be the owner/lessee of the involved vehicle.
    • The vehicle must not have been in compliance at the time of the collision.
    • The owner/lessee must have received at least three notices of noncompliance within three years before the collision.
    • Exceptions and limitations:
    • Applies only to owners/lessees, not operators or passengers, and not to plaintiffs whose claims arise from other vehicles.
    • If there is a catastrophic loss or injury, the cap increases to $750,000.
    • In wrongful death actions, the cap applies only if the decedent was the owner/lessee and conditions are met.
    • The defendant bears the burden to plead and prove eligibility for the cap.
    • The cap applies to actions filed on or after the act’s effective date; requires strict construction.

  • Data Reporting and Public Awareness

    • Department of Commerce and Insurance (DCI) and other agencies will issue a data call to insurers every six months (Jan 1, 2027 through Dec 31, 2028) requesting aggregated data on policies issued and cancelled within 60 days of issuance.

  • Public Education and Displays

    • DOT, in collaboration with Safety and Revenue, may use electronic highway displays to inform the public about financial responsibility requirements. Guidelines for message content, length, and frequency may be established.

  • Effective Dates

    • Sections 1–15 take effect July 1, 2027.
    • All remaining sections take effect upon becoming law.
    • The initial and renewal registration requirements and related provisions are set to sunset 2029 unless otherwise extended.

3) Who/What is Affected

  • Vehicle Owners and Lessees: Required proof of financial responsibility at registration/renewal; potential suspension or revocation of registration for noncompliance.
  • County Clerks: Responsible for administering fees, administering EIVS-based verifications, and receiving portions of the new fees.
  • Automobile Insurers: Must adopt IICMVA model reporting and provide weekly data to DOR; ongoing data-sharing obligations.
  • Department of Revenue (DOR) and Department of Safety (DOS): Administrative roles in certifying financial responsibility, processing notices, and administering the fee allocations.
  • Uninsured Motorist Identification Fund: Receives a larger portion of the new and increased fees; funding for related enforcement and verification activities.
  • Courts and Plaintiffs: Potential cap on noneconomic damages in specific motor-vehicle-related actions; burden of proof for eligibility of the cap.

4) Procedural and Timeline Aspects

  • Implementation Timeline

    • July 1, 2027: Key sections take effect (proof of financial responsibility at issuance/renewal; verification by clerks; insurer data reporting framework begins).
    • 2027–2028: Data calls to insurers occur biannually.
    • June 30, 2029: The initial registration-proof requirement section is repealed unless extended.
    • Ongoing: Increased fee regime for coverage failures, including the $1,500 repeated fee and potential suspension/revocation, if conditions trigger.

  • Publicizing Changes

    • DOR required to publicize the changes to the Financial Responsibility Law and the revised coverage-failure provisions.

  • Reporting and Oversight

    • Insurers and DCI must coordinate data reporting; DOR to maintain updated records as part of the uninsured motorist framework.

Note: This summary reflects the amended version as described in the fiscal notes and legislative text provided. The bill includes several moving parts (fee changes, proof-of-financial-responsibility requirements, noneconomic-damages caps, and data-reporting provisions) that collectively alter enforcement, compliance costs, and civil liability dynamics related to financial responsibility for motor vehicles.

Compiled from official sources — confirm details with the bill’s official record.

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