The California Department of Insurance (CDI) recently held a workshop to discuss proposed labor rate survey and steering regulations that would be beneficial to body shops, and the Association of California Insurance Companies (ACIC) testified in opposition to the proposal. ACIC is an affiliate of the Property Casualty Insurers Association of America (PCI).
The labor rate survey regulations create new standards on how insurers conduct surveys, which could increase costs for auto repairs, according to ACIC. The group also claims that CDI’s proposed steering regulations could inhibit insurers from informing policyholders where they can obtain repair estimates.
ACIC testified in opposition to these proposed regulations during the workshop in Sacramento, Calif. In its testimony, ACIC requested that CDI provide information on its rationale for considering this regulation. ACIC specifically requested how many and the types of consumer complaints CDI has received related to this regulation.
"Absent this consumer data from CDI, we don’t understand how the regulations benefit consumers," said Armand Feliciano, ACIC vice president. "It appears these regulations would merely benefit vendors, like auto body repair shops. Given California’s shaky economy, now is not the time to propose laws that could increase the cost of auto repairs.
"CDI is attempting to legislate through the regulatory process with these proposed labor rate survey and steering regulations. Regulations must have statutory authority granted by the Legislature for them to be valid; CDI does not have legislative authority to make these policy changes."
Under current law, labor rate surveys are voluntary in California, and ACIC says the voluntary surveys help insurers determine how much auto body shops are charging for labor in a certain area and to predict repair costs and establish premium levels.
Current law also prohibits insurers from telling policyholders to go to specific repair shops.
"Any major policy changes like what CDI is contemplating should be considered through the legislative process," said Feliciano.
More information:
PCI
