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Texas AG Rules Insurers’ ‘Proprietary Information’ Public Record

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Jason Stahl has 28 years of experience as an editor, and has been editor of BodyShop Business for the past 16 years. He currently is a gold pin member of the Collision Industry Conference. Jason, who hails from Cleveland, Ohio, earned a bachelor of arts degree in English from John Carroll University and started his career in journalism at a weekly newspaper, doing everything from delivering newspapers to selling advertising space to writing articles.

The Office of the Attorney General in Texas has ruled that information contained in a survey of insurers by the Department of Insurance (DOI) should be made public record. The survey sheds light on several insurers’ DRP practices and how auto repair reimbursement rates, including labor, services, parts and materials, are determined.

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The DOI requested that certain insurers doing business in Texas respond to a survey on how they calculate payments for collision repair services, among other things.

The insurers complied, filling out and returning the surveys, but then objected to the information becoming public, stating that they thought the information was going to be kept confidential and that revealing it would put their proprietary information and/or trade secrets at risk. The DOI then requested an opinion from the Attorney General as to whether or not the information was exempt from public disclosure under the Texas Public Information Act.

Meanwhile, the Houston Auto Body Association and Texas consumers requested that the information be released under the Texas Freedom of Information Act and the Texas Consumer Bill of Rights.

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The AG’s ruling on State Farm’s survey information was that the DOI was not to withhold it because State Farm did not demonstrate that any of the information was proprietary.

Allstate, Farmers, GEICO and Progressive argued that their information was provided to the DOI with the expectation that it would be kept confidential. The AG noted that the information was not confidential under the Texas Public Information Act simply because the party that submitted the information anticipated or requested that it be kept confidential.

As part of the survey, insurers attached their individual DRP agreements and included the criteria that a shop must meet prior to signing a contract with them.

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In response to the request, “Please advise how claimants are informed of auto repair facilities that have a contract or agreement with your company,” State Farm said:

State Farm claim representatives utilize the Auto Damage Service Programs – Discussion Information Guide. The following wording is used:

“You have the right to select a repair facility that will repair your vehicle. Only you can authorize repairs to your vehicle.”

“State Farm has agreements with repair facilities in your area that provide enhanced customer services.”

In response to the request, “Please explain how your company determines the auto repair reimbursement rates, including labor, services, parts and materials,” State Farm said:

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The repair facility survey process is used to determine prevailing competitive prices (PCPs) in the market area. PCPs are the repair prices charged by not less than a majority of the repair market. Pricing and repair capacity information is gathered from all known repairers in market areas as they submit online surveys. The repair market is comprised of repairers who have completed the Repair Facility Survey and who meet the Equipment/Capabilities Criteria. This information is used to determine PCPs.


More information: 

Read all insurers’ survey responses

Texas Department of Insurance Issues Warning to Insurers on Steering

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