Is it a good practice to run motor vehicle record checks on behalf of an insured?
An insured’s prior agent supplied them with a motor vehicle record (MVR) authorization form. They still use it to ask prospective employees to complete prior to having their agent run their MVRs before hiring them and adding them to the business auto policy.
Q: Does this document allow the agent to release MVR information to the insured? Is it a good practice to have all our insureds use this form prior to pulling their prospective or existing employee MVRs?
Response 1: Any agency that obtains an MVR and discusses it with anyone is on thin ice under the Fair Credit Reporting Act (FCRA). The employers should be obtaining the MVR. They can set up an account with a variety of vendors for that purpose. The Federal Trade Commission has more information.
Additionally, some MVR contract providers specifically prohibit sharing or discussing MVRs with anyone. Here is an example of one such contract:
The Consumer Reports provided by Company A are for the sole and internal use of the Insurance Agency, and may not be resold, sub-licensed, delivered or displayed in any way or used by any third party. Insurance Agency certifies that it shall order, receive, disseminate and otherwise use the Consumer Reports in compliance with all applicable federal, state and local statutes, rules, codes and regulations. Insurance Agency agrees to indemnify and hold harmless Company A from any and all damages, costs, judgments and expenses.
If the agency obtains an MVR and then discusses it with the employer or employee, most legal authorities say that the agency becomes a “consumer reporting agency” as defined under the FCRA. That’s exactly where you do not want to be.
Response 2: Yes, the document allows you to release the MVR information to the insured, and yes, it is a good idea to have all insureds use the form prior to pulling an MVR. Also, provide the MVR to the carrier if that driver is added to the policy.
Response 3: The form we use does not ask any questions and states that this information will be provided to your employees as permitted by the FCRA. Underwriting information only is used. Sadly, an amazing number of prospective employees think something will be hidden during the interview process.
Response 4: The answer depends on state and federal privacy and employment laws. Our state has detailed rules on how a driver’s records can be collected and distributed. Your state probably has something similar. You can ask for guidance from your insurance companies and following them to the letter.
Response 5: Check your state’s rules. In New Jersey, it is a permissible and recommended practice for employers to obtain the MVR information for prospective employees.
Response 6: There are plenty of good articles on this in the Big “I” Virtual University research library, including “Running MVRs for Commercial Auto Clients” and “Furnishing MVRs…Legal But Not Permitted.” You should help your customers set up their own accounts to run these direct with the MVR vendors.
This question was originally submitted by an agent through the VU’s Ask an Expert Service, with responses curated from multiple VU faculty members. Answers to other coverage questions are available on the VU website. If you need help accessing the website, request login information.