WASHINGTON--Insurance companies will be required to send monthlydata to a federally regulated database reporting vehicles they haveclassified as total losses, under a new regulation effective April1.

The rule implements a law passed as an anti-fraud measure toprevent cars that had been declared total losses and sold for scrapfrom being retitled and later sold as working used cars byunscrupulous dealers.

Known as "title washing," the issue gained prominence in 2005after cars that were declared total losses after Hurricane Katrinaflooding were retitled in other states and resold without mentionof their provenance.

The law was first passed in 1992 and updated in 1996 but notimposed until ordered by a federal court last September.

Under the regulation, insurers will have to provide the vehicleidentification number; the date the vehicle was designated for junkor salvage; the name of the insured from whom the auto wasobtained; and the name of the owner at the time of filing--that is,the insurance company.

Under the final rule, the name of the insured from whom the autowas obtained by the insurer will be kept confidential and availableonly to law enforcement.

The final regulation under which the data will have to besupplied was published by the Department of Justice Jan. 30.

The DOJ issued a proposed rule Sept. 22 because it anticipatedan unfavorable decision in the court case, which was handed downSept. 29 by Judge Marilyn Patel, according to Melissa Shelk, a vicepresident of public affairs at the American Insurance Association,and David Snyder, an AIA vice president and its associate generalcounsel.

The final rule was issued Jan. 30 in compliance with JudgePatel's order.

At the same time, the National Automobile Dealers Association ispushing for a parallel private system that would be funded andadministered by the insurance industry.

Legislation that would require the parallel system has beenintroduced this year in both the House and Senate.

But Cliston Brown, director of federal public affairs for theProperty Casualty Insurers of America, said enough is enough.

"We do not understand why the dealers think further legislationis needed," Mr. Brown said. "It appears that the Justice Departmentrules give them everything they wanted," he said.

Specifically, insurers now will have to report total lossvehicles starting at the end of March, and the states are requiredto be fully participating in the system by Jan. 1, 2010, Mr. Brownsaid. "This provides everything they want and we are puzzled aboutwhy they are not satisfied," he added.

The bills, H.R. 1257 and S. 202, would require insurancecompanies to disclose the vehicle identification numbers (VINs) oftotaled cars to vehicle history providers before the vehicle getsback into the marketplace.

Arguing for more regulation, Ivette Rivera, National AutomobileDealer Association executive director of legislative affairs, saidthat because the NMVTIS (National Motor Vehicle Title InformationSystem) rule is based on a 1992 statute, it only requires monthlyreporting from "insurance, junk and salvage yards."

H.R. 1257 and S. 202 would make the reporting requirementelectronic and timelier to eliminate the window for fraud, shesaid.