The National Conference of Insurance Legislators (NCOIL) will discuss "model legislation" touching on airbag fraud, aftermarket parts use and steering at its summer meeting next week, but already the New York State Auto Collision Technicians Association (NYSACTA)
says that it disagrees with
several elements of the legislation.
NCOIL says its "Act Regarding Motor Vehicle Crash Parts and Repair" sets to address insurer crash parts mandates and steering. It would require notice and approval before crash part repair or replacement and would establish conditions in which insurers may require use of aftermarket crash parts through policies. Insurers would also have to warrant that aftermarket crash parts used are "at least equal to" the OEM parts being replaced. It would also mandate "permanent, transparent" identification of crash parts through invoicing and records-keeping.
NYSACTA, however, says that the legislation is insufficient because insurers can’t truly warrant the quality of aftermarket parts. Instead, NYSACTA says it will be the responsibility of shops to ensure that the parts fit and function correctly and to deal with problems that could arise if aftermarket parts don’t perform as they should. NYSACTA President Mike Orso also questioned the motives of insurers, whom he believes are putting profits in front of the well-being of insureds who may not understand the implications of using non-OEM parts.
"Most consumers wouldn’t understand the risk," Orso said.
As for steering, the model legislation states that "no insurer providing collision or comprehensive coverage shall require that repairs be made in a particular place or by a particular concern" and that insurers who show a "pattern of violation" of this rule should be penalized under state law.
"Consumers, perhaps now more than ever, should be able to choose the crash parts and service shops they want," NCOIL Property-Casualty Committee Chair Rep. Charles Curtiss said. "The proposed NCOIL model isn’t trying to punish anyone – it just looks to give consumers options while supporting a competitive market."
Orso says the legislation’s approach to steering is too soft because it doesn’t outline what constitutes a "pattern of violations" by insurers.
"How many violations are enough: 10 or 100?" Orso said. "If the limit before a penalty is assessed is 100 in any given month and only 99 consumers file complaints that they were steered, there’s no penalty and nothing is done? We feel one is too many and it has given insurers a large loophole."
A second piece of NCOIL model legislation titled "Model Act Regarding Auto Airbag Fraud" would combat various forms of airbag fraud by: requiring body shops to show an airbag bill of sale before insurer reimbursement, adding a place on accident reports to note whether an airbag deployed, and establishing the theft and black-market purchase or installation of a faulty or fake airbag as a misdemeanor or felony. The model legislation specifically requires those who install or sell airbags to keep detailed records of the purchase, sale or installation of an airbag for at least five years.
"It’s shocking that some folks think making money is more important than keeping people safe," Curtiss said. "If NCOIL and state legislatures don’t stop this, too many of our constituents will drive along believing their vehicles are sound – when in fact there’s no working airbag to protect them."
NYSACTA says that current law in New York is sufficient, and this model legislation is unnecessary.
"Further insurer involvement requiring receipts isn’t necessary unless insurers want to, by contract, make their own DRP shops produce invoices," Orso said.
Once agreed upon, NCOIL uses model legislation as the basis for bills proposed in legislatures throughout the U.S.
For more information about NCOIL’s upcoming meeting, visit www.ncoil.org.
Click HERE to download NYSACTA’s complete statement on the model legislation.
