Volume 13, Issue 5 - September/October 2011

Independent’s Day
an iga viewpoint

 

Fighting Unfair Trade Practices
by Alan Epley

Recently the South
Carolina House of Representatives voted 104-1 to approve House Bill 4042, an unfair trade practices bill. The bill moves now to the Senate, which will take it up in January when it convenes for the last part of its two-year session. If it is not passed or is voted down, it will die in June 2012.

This short and sweet bill simply reads as follows:

“It is an unlawful trade practice for a motor vehicle glass repair business actively engaged in the repair of motor vehicle glass, or a person or entity with a ten percent or more ownership interest in that business, and acting as a third-party administrator of insurance claims made pursuant to insurance coverage for motor vehicle glass repair to: (1) refer or steer, or cause to be referred or steered, an insured’s motor vehicle glass repair business to itself; or (2) use consumer information obtained in the process of acting in that dual capacity to solicit motor vehicle glass repair business.”

The insurance lobby showed very little opposition in open testimony. One USAA representative voiced opposition because it would interfere with the company’s model. USAA utilizes Safelite Solutions as its third-party glass claims administrator (TPA), and Safelite’s general counsel, Brian DiMasi, voiced considerable opposition to the bill.

Needless to say, the political war will be ramped up in the days leading up to the Senate Committee discussion and vote.

Any opposition from carriers should be seen as self-incriminating toward the concepts of TPA/competitor conflict of interest and their “interests” in that topic. In one meeting, a legislator who also is a physician pointed out that such conflicts of interest are illegal under the same scenario in medical coverage. So, what’s the difference in glass coverage insurance? None.

“Sooner or later those with these conflicts of interest will have to come clean on their only argument, which is that there are not any complaints.”

Self-Incriminating Evidence
The lawmakers in South Carolina have been exposed to this problem for many years and the recent extraordinary vote exemplifies the sentiment of this grossly unfair situation. Sooner or later those with these conflicts of interest will have to come clean on their only argument, which is that there are not any complaints.

Glass shops all over South Carolina are complaining vehemently to their state lawmakers. Both those that oppose the “fox guarding the henhouse” and those that may think it’s fair will present their arguments over the next few months and the South Carolina senate will decide what is best for the consumers and businesses of the state.

In February 2007, Nationwide Insurance testified that approximately 80 percent of all its glass repair and replacement work in South Carolina is performed by its TPA’s retail arm. The general counsel for that retail company confirmed the same during a state Senate subcommittee meeting held around the same time. At that time, this company did not advertise in the mass media and testified that there were 200 glass shops in the state.

So how is it possible that this company did the majority of Nationwide’s work, if it was not using its TPA arm to direct claimants to itself? How is this possible when carriers do not contract any auto glass company to repair or replace auto glass? The answer is obvious, and the final decision will rest on the good commonsense of elected officials.

Both sides understand the repercussions of this bill and the similar bills being reviewed throughout the nation. If your company has been harmed by a “fox guarding the henhouse,” please let the South Carolina Senate briefly know how and why. Please include your company name, city and state. Let’s all speak up and start the snowball effect in every state. n

Alan Epley is president of the Independent Glass Association (IGA). He also serves as president of Southern Glass and Plastic in Columbia, S.C.


AGRR
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