Michigan Bill Addresses Insurer-Mandated Parts Procurement

Michigan Bill Addresses Insurer-Mandated Parts Procurement

If enacted, this legislation would end all requirements for Michigan repairers in DRP agreements to use a specific vendor or process to procure parts and other materials.

ASAOn July 1st, Michigan State Sen. Joe Hune (R-22), chairman of the Senate Insurance Committee, introduced Senate Bill 430, a bill that amends the insurance code to prohibit insurers from requiring automotive repairers to use a specific vendor or process to procure parts and other materials. If enacted, this legislation would effectively end all such requirements in current DRP agreements for Michigan shops.

This bill was introduced in response to the Automotive Service Association’s (ASA) advocacy efforts in the Michigan legislature.

“This bill would continue to allow repairers to choose their parts procurement systems and their parts vendors as they currently do with a majority of their customers’ insurance carriers,” said Ray Fisher, president of ASA-Michigan. “In turn, this will continue to increase efficiency for the automotive repair process by supporting local parts vendors and ensuring quality parts for consumers.”

Added ASA President Dan Risley, “ASA has communicated our concerns with mandatory parts procurement to the industry. We believe that direct repair program mandates to utilize specific vendors to purchase parts and/or third-party software applications adversely impacts collision repairers and consumers.

“When you allow repairers the freedom to choose the best means to efficiently operate and manage their business and the claim, it benefits all the stakeholders (insurer, repairer and the consumer). This bill will allow collision repairers to identify and select the best vendors to purchase and source parts. More importantly, it will foster healthy competition among parts vendors and third-party software providers where the best product and service will prevail. A free and open marketplace always results in better product and service.”

S.B. 430 is now before the Committee on Insurance for further consideration. If enacted, this bill will go into effect within 90 days. To review S.B. 430 and related issues, visit ASA’s legislative website, www.TakingTheHill.com.

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