Volume 10, Issue 4 - July/August 2008

Legislation
legal updates

Connecticut Governor Signs Anti-Steering Bill

Connecticut Gov. M. Jodi Rell has signed a bill that will require disclosure to consumers that they have the right to choose the repair facility to complete repairs to their motor vehicles in the state.

House Bill 5152 (now Public Act No. 08-146), which will go into effect January 1, 2009, will require insurance companies to include the following notice on all issued insurance cards in capital letters and boldface type:

“You have the right to choose the licensed repair shop where the damage to your motor vehicle will be repaired.”

The bill also will require motor vehicle repair shops to provide notice to insurers of the need for supplemental repairs and to establish a time frame for insurers to inspect the motor vehicle prior to commencement of such supplemental repairs.

Washington Amendment to Anti-Steering Law Meets End in Senate Hearing
Washington House Bill 3053, which would have amended the state’s current anti-steering law and would prohibit an insurer or claims administrator from recommending an auto glass repair or replacement shop if the insured indicates he has chosen a facility, met its end in earlier this year while under Senate review.

“It’s gone—dead,” says Rep. Steve Kirby (D-Wash.), who introduced the bill originally in the house, “but it’ll be back next year.”

On February 26, a hearing was held before the Senate Financial Institutions and Insurance Committee regarding the bill, which ultimately led to its demise. Insurers came out in full protest against the bill, calling it “anti-consumer” and referring to its restrictions as a “gag order.”

Kirby had advised AGRR magazine/glassBYTEs.com™ that the bill’s fate in the Senate, though, wasn’t surprising.

“Legislation that regulates the insurance industry usually fares better in the House than in the Senate,” he said. “It is a strategy for the insurance industry to let things happen in the house and wait for them in the Senate and beat them down there.”

He also said the insurance industry’s opposition to the bill is characteristic of the insurer group’s recent activities in Washington regarding legislation that involves them.

“I believe the insurance industry has drawn a line in the sand in the state of Washington and will fight to the death with every piece of legislation that attempts to regulate them in any way,” he said.

“At its core, this bill presents a huge problems in that it prevents insurers from communicating to its insureds the services and rights that they have paid for,” said Mel Sorenson, speaking on behalf of the Property and Casualty Insurance Association of America, during the February hearing.

Cliff Webster, speaking for the American Insurance Association, agreed.

“[The bill] would decrease the amount of information available to insureds and that’s not fair to the consumer,” he said.

A Belron US/Safelite representative, Dan Coyne, also was in attendance to speak out against the bill.

“If enacted, this bill would effectively be a gag order,” he said.

One insurer representative argued that the bill is not one of importance to consumers.

“All we want is a seamless claims system. We’re not getting complaints about this,” he said.

However, the bill, which arose from work conducted by the Washington Independent Auto Glass Association and Seattle-based All Star Glass, also met lots of support from the auto glass industry with assistance from the Independent Glass Association, who insisted it’s not meant to be a gag order.

“It is not our intent in any shape or form to gag the insurers,” said Lisa Thatcher, speaking on behalf of All Star Glass.

Pam Shearer of Auto Glass Plus also spoke.

“What this bill is about is third-party administrators who also own glass shops whose language does interfere with a consumer’s right to choose,” she told the committee. “The language they use is, ‘Unless you instruct me otherwise, I’d like you to use a particular shop.’”

Christie Newman, also of All Star Glass, noted that while the current law, passed last year, does have merit, she believes it is still flawed. 

“There is a big loophole in this bill that a third-party administrator can advise that they own the shop right before they start the repair,” she said. “This bill is trying to prevent steering away of a consumer’s choice.”

Sen. Don Benton advised Shearer asked if it’s possible this is an issue that’s not of importance to consumers.

“Maybe they don’t care and they just want their windshields fixed,” he said. “Maybe that’s the bottom line.”

“I do believe consumers who have a choice in mind do care,” she replied. 

AGRR
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