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?
“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.”
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
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,
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