Industry Issues & IdeasPosted 1/14/2003
By Alexis Gross
ASA Collision Division Director Chris Dameron detailed the division's plans for 2003 and beyond at the recent International Autobody Congress and Exposition (NACE) in Dallas. Insurance company ownership of collision shops, shop licensing, disclosure laws and information availability will be the focus of the division's efforts.
Insurance company ownership of repair shops is one of the major concerns facing the industry, Dameron said.
"We reached the consensus that it is not in the best interest of the industry or motorists for insurance companies to have ownership interest in a repair business," Dameron said.
The operations committee took this concern to the ASA board of directors in October. The board adopted the following position statement: "ASA opposes insurance companies having ownership interest in automotive repair facilities and views ownership as being in direct conflict with the consumers' right to choose. ASA has historically supported the consumers' absolute, unequivocal right to choose a repair facility for a collision or mechanical repair."
Because insurance is regulated at the state level, problems often require localized action, Dameron said. However, because many insurance companies conduct business in several states, and because states often follow one another's lead on regulatory issues, ASA's efforts in one state will likely impact other states.
The association recently contacted 4,650 collision shop owners in Texas to encourage their grassroots support of legislation state Sen. John Carona introduced. Carona, R-Dallas, announced at NACE that he was drafting a bill to prohibit insurance companies from having an ownership interest in collision repair shops. Carona prefiled the bill in advance of the 2003 Texas legislative session, which convenes Jan. 14.
As one of the most highly populated states in the nation, Texas is often a bellwether state. ASA will continue to actively support and promote this Texas initiative and other initiatives across the nation.
Another important piece of legislation the Collision Division is monitoring is U.S. Senate Bill 2850, introduced last year by Sen. Charles E. Schumer, D-N.Y. This is a far-ranging bill that is intended to reduce the rate of automobile insurance. One section of the bill calls for licensing collision shops that perform work paid for by insurance companies. The purpose of licensing shops within the context of this bill is to create a mechanism for policing against fraud.
ASA surveyed its membership in 2001, prior to the bill's introduction, to determine if members favored or opposed shop licensing. Eighty-eight percent of ASA collision members responded in favor of shop licensing.
"This enables ASA to remain open to such legislative measures so long as they would benefit our member shops and the motoring public," Dameron said. "As the Schumer bill continues to work through the Senate judiciary committee, ASA will be the collision industry's watchdog to ensure the concerns of our members and other industry professionals are heard. If necessary, we will participate in hearings and we will be in ongoing dialog with the senators and their staffs that are directly involved in this legislation."
ASA continues its support of disclosure laws that require insurers and collision repair businesses to obtain written consent from vehicle owners before installing alternative replacement crash parts.
"ASA's position on this matter has not changed," said Dameron. "However, rather than focusing on this issue at the state level, the association is now turning its attention to the national level."
With regard to the information availability agreement reached in 2002, Dameron emphasized that it is not only a mechanical issue but a collision issue as well - one which will benefit every single non-dealer collision repair professional in the United States.
"With each new model year, more and more vehicle systems and parts are wired with sensors," Dameron said. "As this technology grows, our need for mechanical repair information grows. Without the availability of OEM information, the ability of non-dealer shops to fully and properly repair vehicles would certainly diminish. In short, this agreement ensures the future of independent collision repair."
The agreement calls for manufacturers to make repair information, tools and training available by Aug. 31, 2003. Most manufacturers reported to ASA at the CARS convention in November that they will have their information available in the first quarter of this year, well ahead of the agreement deadline.
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