Legislators at the NCOIL annual meeting – responding to what it called aggressive and near-universal opposition from interested parties – set aside a proposed Model Act Regarding Insurer Auto Body Steering and will consider it further in 2011.
NCOIL says the overwhelming Nov. 20 vote in Austin, Texas, marked the Property-Casualty Insurance Committee’s latest action to promote consumer decision-making through limits on insurer body shop referrals.
Then-Committee Chair Sen. Ruth Teichman, speaking for the group, said, “We certainly want to promote a system that lets consumers choose the repair shops they want, rather than respond to insurer demands or pressure. But considering the wide-ranging opposition to our proposed model, moving forward with this draft language seemed unwise. Is there a better way to safeguard consumer choice? Possibly, and that’s what the Committee may choose to discuss next year.”
The proposed model act – a substitute to a more restrictive July 2009 version – would have prevented an insurer from requiring someone to use a specific facility and would have banned insurer coercion, intimidation or interference with consumer choice. The substitute bill, which legislators in Austin postponed indefinitely by a 16-to-7 vote, also would have allowed insurers to recommend repair locations, regulated insurer payment of non-preferred body shops and promoted disclosure and accountability.
The substitute draft – which grew from under two pages in length to 11 with the addition of interested-party comments – was opposed by insurers, who alleged that the bill was unconstitutional and that its limits on insurer information-sharing were anti-consumer. It also was opposed by collision repair representatives, who said the language was more lenient than some existing laws, failed to address the nuances of the claims settlement process and lacked strong enforcement. It was supported, however, by the Independent Glass Association, which cited a need for such legislation.
Proposed NCOIL steering restrictions first appeared in a broader draft bill on aftermarket crash parts and were based almost verbatim on New York State law. The substitute model considered in Austin was influenced by Rhode Island and Virginia statutes.
More information:
Glass, Collision Reps Speak Out on Steering at NCOIL Meeting
