Volume 14, Issue 2 - March/April 2012

AGR Reports
breaking news

LEGAL NEWS
Industry Legislation Sparks Opposition from Insurance Association and Safelite

Legislation in two states has caused an insurance association and auto glass company Safelite to respond with statements of opposition. The Property Casualty Insurers Association of America (PCI) has released a statement claiming that the South Carolina anti-steering bill, HB 4042, is “inconvenient” and could “raise costs for consumers.”

The South Carolina Senate banking and insurance committee has passed the bill favorably, according to a representative in the office of Sen. David Thomas, who chairs the committee. The bill contained one amendment upon passage. The amendment includes a number of additions from the bill's original text, which would have prohibited third-party administrators (TPAs) that also have retail divisions, or that have 10 percent ownership or more in an auto glass business, from referring policyholders' glass claims to themselves or from using information obtained through its work as a TPA to solicit business.

The amendment prohibits TPAs from "requiring that repairs be made to the insured's vehicle in a particular place or shop or by a particular concern." In addition, it further provides that TPAs must, on their network lists, "include providers regardless of its opinion of the quality or workmanship of the provider concerned if that provider performing glass repair services will meet all requirements of the policy of automobile insurance issued by the automobile insurer which the third-party administrator represents."

“Many years ago, it was common to have to get three estimates to submit to the insurer, a time consuming process that was not exactly customer friendly,” according to the PCI statement. “Because most people don’t have the need for auto body or glass repair very often, they were very much on their own. Auto glass damage claims, being smaller in severity and more frequent in number lend themselves well to direct repair programs. Glass repair networks developed and some of these providers began offering third party administrator services to help insurers handle glass claims. Consumers have been shown to like these programs; a recent JD Power Survey found that people who take their vehicles to network repair facilities are more satisfied than those who use other facilities.”

The South Carolina bill 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.”

Many in the insurance industry are against the bill.

“This bill would severely limit auto insurers’ ability to choose business practices that best serve their customers, limit choices available to consumers for repairing damaged auto glass and potentially increase costs that impact insurance premiums,” says Bob Passmore, senior director of personal lines at PCI. “The ability of glass repair facilities to help insurers handle glass claims have shown benefits to consumers. While PCI does not explicitly endorse specific business practices … we do support the ability of insurers to develop and offer innovative products and programs to their customers.”

According to a representative from the Senate banking and insurance committee the bill “passed in an amended form” and will be held by the committee until all committee members can come to agreement on the changes. If and when all committee members are in agreement the bill will move forward for a vote in the Senate.

Safelite also has released a statement of opposition to Arizona bill SB1331, which, at press time, was under review in the Senate’s Banking and Insurance Committee.

The bill, similar in nature to the current South Carolina bill, reads as follows: “It is an unlawful practice for an auto glass repair business that is actively engaged in the repair of auto glass, or a person or entity with at least a ten percent ownership interest in that business, and that acts as a third-party administrator of insurance claims made pursuant to insurance coverage for auto glass repair to either: (1) refer or steer, or cause to be referred or steered, an insured’s auto glass repair business to itself. (2) Use consumer information obtained in the process of acting in that dual capacity to solicit auto glass repair business.

“After reviewing the additions to the Arizona auto glass fraud bill, it is amazing to see what we attempted to put into the bill in the very beginning,” says Kerry Soat, CEO for Fas-Break, Inc., in Chandler, Ariz. “This bill should cover third-party administrators as well as auto glass guys, but as I stated in the negotiations, it should also cover body shops, towing companies, auto repair shops and anyone else dealing with your vehicle ... Now they are attempting to do what should have been done in 2010 and that’s get to crux of the issues.”

The response from Safelite claims that a bill like this one would leave 700-plus people without jobs in the state of Arizona.

“This bill is a direct attack on a single company in a single industry operating successfully in the free marketplace,” says Brian O’Mara, vice president of national contact center operations at Safelite. “We currently employ 581 people at the Chandler contact center, with this number expanding to over 700 during peak seasons. Including our other operations, Safelite employs over 800 people statewide. Further, we are currently holding a $3.5 million expansion project that would increase our contact center’s employee base by hundreds. These are all new jobs that Safelite is working to bring to Chandler.”

PUBLICATION NEWS
Key Communications Inc. Purchases Auto & Flat Glass Journal
Key Communications Inc., publisher of Auto Glass Repair & Replacement (AGRR™), glassbytes™, USGlass magazine and several other titles serving the glass industry, has purchased the assets of Auto & Flat Glass Journal from BKB Publications of Florida.

“Auto & Flat Glass Journal has long been known for providing step-by-step details and technical information about auto glass installations and we plan to continue in that tradition,” says publisher Debra Levy. “We are excited for the opportunity to maintain and advance the technical knowledge base of the industry. We have a lot of exciting plans for the publication which we will be sharing over the next few months as well.”

“We are delighted to see Auto & Flat Glass Journal move to Key Communications,” says Brian Burkhart, owner of BKB publications. “The company has a long, strong history of serving the glass industry and we feel Auto & Flat Glass Journal is in good hands.”

Levy says that effective with the next issue, the publication will become every-other-month but that current subscribers will
see their subscriptions extended to accommodate for the change. The name will also be shortened to Auto Glass Journal. It will be targeted toward installing technicians published in alternating months from AGRR, the company’s magazine for owners, managers and other personnel in the auto glass repair and replacement business.

Subscriptions to AGRR magazine are free to qualified personnel; subscriptions to Auto Glass Journal are $49 for two years (12 issues). Both can be ordered by visiting www.glass.com/subcenter.

 

 


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