Administrative Problems of Financial Responsibility Laws

Abstract

The first financial responsibility law in the United States was enacted by the Connecticut General Assembly of I925, to become effective on January i, I926. It was drawn by the writer who was at that time Commissioner of Motor Vehicles for Connecticut. It seemed to be accepted by the Connecticut Legislature as a substitute for a mass of proposed compulsory insurance legislation which had considerable public support but was opposed by insurance interests and thought impractical for state administration.' So the financial responsibility law was born. Its purpose was, and is, to secure a larger percentage of responsible autoists on the highway. Laws built upon this theory are planned to provide a financial guarantee for satisfactory operating conduct from such persons as come under their provisions, namely, those who have violated specified motor vehicle laws2 or have been determined responsible for death or serious accident. Their enforcement in states and provinces which have operators' licensing systems is usually entrusted to the state authority; in charge of motor vehicles and was consequently expected to be a simple procedure, because the filling of all requirements under them can be, and is, made a condition precedent to either the issuance of a new license or the return of one which has been suspended. This article cannot scrutinize the detailed provisions of these laws, already enacted in thirty states and territories and eight Canadian provinces3 but will concern itself * B.A., I893, M.A. (hon.) 1928, Yale University; LL.B., I895, New York Law School; M.A. (hon.), 1925, Trinity College. Member of Connecticut Bar. State Commissioner of Motor Vehicles, Connecticut, I917-1933. Research Associate in Highway Transportation, Yale University. Co-author, with M. A. May and R. S. Kirby, of Sense and Safety on the Road (Appleton-Century Co., I936). 1Compulsory insurance as then proposed was to be based upon a theory of state underwriting and upon the idea that insurance companies might be obliged to write all risks at rates to be prescribed by the state. 2 In the Connecticut Act the requirement is that a sufficient guarantee must be provided to satisfy any claim for damages arising from personal injury or death to at least $Io,ooo and for damage to property of at least $I,ooo the qualification to be supplied by-(i) insurance policy, (2) surety company bond, (3) deposit of money or collateral, (4) real estate lien. The qualification by insurance is the only method enough used to call for further discussion except to remark that in an occasional case one of the other methods is applicable and meets the conditions. 3 These laws are analyzed in Braun, the Financial Responsibility Law, supra p. 505. For a brief discussiori of these laws, reference may be made to STOECKEL, MAY, AND KIRBY, SENSE AND SAFETY ON THE ROAD (I936).