Using an insurance MVR for hiring decisions—should you?

May 19, 2017 / 2 min read

According to most state licensing agencies, is it acceptable to share a Motor Vehicle Report (MVR) requested for insurance purposes with an employer, or vice versa? If you answered “no,” give yourself a pat on the back.

Many Consumer Reporting Agencies (CRAs), including iiX, obtain MVRs directly from state licensing agencies (departments of motor vehicles, departments of public safety, etc.). By contracting with these state agencies, CRAs are required to comply with all applicable federal and state regulations, including reoccurring audits, to ensure compliance.

Prohibitions on sharing

The contracts also include a prohibition stating that an MVR may not be used for any purpose other than the purpose for which it was originally ordered, nor can it be given to anyone outside of the requesting organization. This logic is based largely upon the Fair Credit Reporting Act (FCRA) and the Drivers Privacy and Protection Act (DPPA), intended to protect the privacy rights of consumers.

You may be thinking, “What is the difference if I hand over the report to an insurance company or employer if it’s needed?” The answer lies in the amount of information your organization may be able to receive, as well as the potential for penalties brought to your organization.

In many states, the information provided on an insurance MVR is significantly different than the information provided on an employment MVR. Many regulations imposed by the Federal Motor Carrier Safety Association (FMCSA) require the MVRs used for employment purposes to contain additional years’ worth of information, additional violation types, and medical information.

Depending upon the state, the insurance industry may not be eligible to view some of this information, or make use of the information under state law. Because of these differences, an insurer using an employment MVR to make rating decisions may be basing those decisions on incomplete or prohibited information. Looking from the other spectrum, an employer using an insurance MVR to make hiring decisions may not have all the available information to make a sound hire.

FCRA lawsuit risk potential high

Today the potential for a class action suit under the FCRA is high. Consumers are much more in tune with what their rights are with respect to privacy. Employers must be able to understand and comply with the FCRA requirements placed upon them or place the business at risk. Criminal and civil penalties may exist for violating the FCRA, so we recommend speaking with your legal counsel for additional guidance.