Collision Leaders Take Insurance Reform Message to Capitol Hill

Posted 9/10/2009
By Robert L. Redding Jr.

Automotive Service Association (ASA) collision leaders traveled to Washington, D.C., July 28-29, to visit with members of the U.S. House of Representatives and the U.S. Senate about insurance reform issues. The U.S. Congress is in the midst of drafting legislation to regulate the nation's financial services industries. President Barack Obama has indicated in draft legislation, on this same issue, that the administration would like to see the insurance industry included in federal regulatory efforts.

Collision leaders from across the nation held numerous House and Senate meetings. U.S. Rep. Allen Boyd, D-Fla., addressed participants at a dinner meeting prior to the ASA Capitol Hill Fly-In. Boyd kicked off the Fly-In with an overview of what Congress would address prior to the congressional August recess. Boyd, as a leader of the Blue Dogs, a group of conservative democrats, discussed health care reform and the dialogue occurring in the House of Representatives. The Blue Dogs will be an integral part of any final health care reform outcome.

Following the briefing with Boyd, participants met with their members of Congress and senators as well as other key congressional leaders involved in the insurance reform debate. Ron Pyle, ASA president and chief staff executive, and ASA officers met with insurance reform bill sponsor Rep. Melissa Bean, D-Ill., and Rep. Gene Taylor, D-Miss., McCarran-Ferguson Act repeal bill sponsor, to thank them for their leadership on these important issues.

Bean and Rep. Ed Royce, R-Calif., have been working with ASA to advance H.R. 1880, which includes a first-time federal property and casualty option for insurers. To date, many congressional hearings and bills have included only a life option for insurers. Bean and Royce recognize the importance of heightened regulation of property and casualty insurers.

In Capitol Hill meetings, repairers explained their support for the federal regulation of the property and casualty insurance industry by highlighting the following points:

• The state insurance regulatory structure has failed for consumers and collision repairers. Without federal regulatory recourse, consumer and small business complaints are left to generally ill-equipped state regulators.

• State regulators are less likely to recruit top professional employees to oversee increasingly complex insurance products offered by insurers as well as deal with more complicated issues. Federal regulators have access to a degree of human resource and other capital that state agencies do not enjoy.

• After years of complaints, many states lag in addressing important consumer and small business issues: i.e., consumer steering, insurer pressure to use inferior auto parts, paint caps, etc. These problems are increasing for consumers and repairers, not decreasing.

ASA has supported the repeal of the McCarran-Ferguson Act for many years. Since 1945, insurance companies have had a "limited" exemption from federal antitrust laws that apply to most other industries assured to them through an act of Congress. The McCarran-Ferguson Act provides that federal antitrust law applies to the "business of insurance" only to the extent that such a business is not regulated by state law. The anti-competitive consequences of McCarran impact both consumers and small businesses that have to deal with insurers.

During the Clinton Administration, the House of Representatives came close to a repeal of McCarran as it debated health care reform. U.S. Senate Judiciary Committee Chairman Patrick Leahy, D-Vt., is a supporter of McCarran repeal and introduced legislation in the 110th Congress. ASA asked House Judiciary Committee leaders to consider hearings on the repeal during this 111th Session.

There is no stronger message on Capitol Hill than small businesspersons taking the time and expense to visit their representatives in Washington, D.C., to express their views about current legislation. The timing of the Fly-In allowed repairers to share their insurance reform views when policymakers are most focused on this particular issue. The House Financial Services Committee will resume consideration of financial services reform legislation, including insurance reform, in the fall.

Comments following the meetings clearly demonstrated the importance of repairers being heard on Capitol Hill. Many participants have asked to participate in a 2010 Fly-In.

For more information regarding the 2009 Collision Fly-in and photographs, please go to ASA's legislative Web site, www.TakingtheHill.com/summit.htm.

Bob Redding is the Automotive Service Association's Washington, D.C., representative. He is a member of several federal and state advisory committees involved in the automotive industry. For more information about the legislative activities of ASA, visit www.TakingTheHill.com.