The Property Casualty Insurers Association of America (PCI) has sued Rhode Island Director of Business Regulation Paul McGreevy and Attorney General Peter Kilmartin in Federal Court, challenging the constitutionality of Rhode Island’s Anti-Steering Act, online legal journal Courthouse News reported. The act prohibits insurers from recommending repair and body shops to customers and third-party claimants after accidents.
The state’s 1997 Anti-Steering Act states: "The insured or claimant shall be promptly informed by the insurer of his or her free choice in the selection of an auto body repair shop. Once the insured or claimant has advised the insurer that an auto body repair shop has been selected, the insurer may not recommend that a different auto body repair shop be selected to repair the automobile."
PCI claims that "this ban interferes with the ability of the insurer not only to communicate with claimants generally, but also communicate with their customers, the insureds, regarding repair options and benefits that these insureds have paid for through insurance premiums, thereby unconstitutionally prohibiting truthful commercial speech related to a lawful activity."
In 2005, Rhode Island expanded on the Anti-Steering Act with a "Bulletin" stating that insurers must "promptly" inform insureds of their free choice in selecting an auto repair shop and then immediately ask the claimant whether or not he or she has selected a shop, Courthouse News reported.
"When this occurs, the insurer is precluded from providing valuable information that many claimants would like to know about, including possibly better repair options and benefits available to them, and claimants are denied the opportunity to make an informed repair choice," PCI’s complaint states.
PCI represents more than 1,000 insurance companies that conduct business all over the country, of which 256 are licensed in Rhode Island.
PCI is asking the court to declare the Anti-Steering Act and Bulletin, under the First and 14th Amendments, as interfering with "commercial free speech."