Last week, the National Conference of Insurance Legislators (NCOIL) met
in New Orleans, La., to discuss a proposed model act on airbag fraud
that eventually was passed by the NCOIL Property and Casualty committee
after opposing testimony provided by collision repairers and others led
to amendments.
The airbag fraud model act establishes criminal penalties for
fraudulent installation or reinstallation of an airbag; requires
detailed recordkeeping for anyone who buys, sells or installs airbags;
and mandates that vehicle owners receive documentation from repairers
saying that an airbag was installed properly, among other things,
according to NCOIL. However, several associations representing
repairers and auto manufacturers expressed concern that the model act’s
original language could legitimize the use of salvage airbags by
describing a proper process to follow if the're used in the repair
process.
NCOIL model acts are developed and passed by NCOIL, and then made
available for individual state's legislators to consider for adoption
within their own legislative sessions.
The Society of Collision Repair Specialists (SCRS) and the Automotive
Service Association (ASA) had previously testified against the model at
the
summer NCOIL meeting,
and SCRS has since been involved in at least seven interim conference
calls with legislators held on both this particular model act and
another that addresses both aftermarket crash parts and steering.
In the most recent November meeting, SCRS' testimony of opposition,
delivered by Executive Director Aaron Schulenburg, was paired with
similar opposing arguments from the Alliance of Auto Manufacturers
(AAM), the Association of International Auto Manufacturers (AIAM) and
various individuals representing automakers such as BMW and GM. These parties were not against direct notification to the consumer or more
thorough documentation as outlined in the model, but were opposed specifically
to the salvage airbag issue.
Throughout the testimony, the SCRS said it became clear industries hold a tremendous
amount of concern over the safety for the consumer and liability for
the repair facilities that are tied to the use of salvaged airbags, which it says is an uncommon practice in collision repair facilities today. In
addition, the testimony offered by SCRS discussed concerns about the
"unintended consequences" the model may have, such as causing a
widespread use of salvage airbags and opening the door for insurers to
specify these parts in claims settlement, which it said was seemingly
legitimized through the original language in the model.
After the preliminary hearing Nov. 19, SCRS offered an interim update
via e-mail to its affiliate associations urging them to immediately start a grassroots outreach to the state
legislators who were in attendance at the meeting, and strongly urge them to
oppose the model act as written.
"I am proud of the efforts from those 'back home' in our industry,"
said Schulenburg. "I had numerous representatives of the legislature
serving on the NCOIL committee comment to me on how many calls and
e-mails they received from SCRS members and collision repair facilities
on Friday. It was very obvious that the direct communication from our
industry to the legislators from the district level was impactful and
effective in their votes on Saturday. Our industry's voice was heard,
and the concerns expressed certainly played a large role in improving
the outcome."
After much lobbying and discussion with the representatives, the
opposing parties, including SCRS, supported an amendment offered by
Kentucky Rep. Steve Riggs, which added that "any person who installs a
salvaged airbag in a vehicle shall apply a permanent, durable label
that clearly states that the vehicle contains a salvaged airbag. Such
label must be permanently installed on the dashboard of the vehicle.
Any person who removes such a label shall be guilty of a criminal
offense."
"We appreciate the support from Representative Riggs and all those who
voted in favor of including this amendment in the model," added SCRS
Chairman Barry Dorn. "This one amendment reduces the negative impact we
felt the bill had the potential to unleash, and ensures that any
consumer who owns or enters the vehicle, now or in the future, is aware
of the presence of salvaged airbags and can make informed decisions due
to that very visible information."
NCOIL has delayed action on the Model Act Regarding Motor Vehicle Crash Parts and Repair until its next meeting.
More information:
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Airbag, Aftermarket Parts Model Legislation to Be Debated this Week