NCOIL Makes No Decision
on Model Crash Parts Bill
By Robert L. Redding Jr.
ASA Urges NCOIL to Make a Final Decision at Annual Meeting
In what has become a predictable occurrence, the National Conference of Insurance Legislators (NCOIL) Property-Casualty Insurance Committee delayed a final decision on its Proposed Model Act Regarding Motor Vehicle Crash Parts and Repair. In addition, the Committee opted to push its Proposed Model Act Regarding Insurer Auto Body Steering to the fall annual meeting in Austin, Texas.
NCOIL described the Model Crash Parts Act as applying "to personal lines motor vehicle insurance policies and protects consumers filing auto body damage claims with their insurers. The model requires disclosure and consent prior to crash part repair or replacement; establishes conditions whereby insurers may specify use of aftermarket crash parts; and mandates permanent, transparent identification of crash parts."
What the bill's summary does not highlight are the following collision repairer concerns: aftermarket parts certification; the lack of a formal consumer-written consent process for the use of replacement crash parts; and certified parts equivalency to original equipment manufacturer (OEM) parts.
Automakers, repairers, insurers, parts distributors and the Certified Automotive Parts Association (CAPA) typically submit comments, letters or testimony at the NCOIL Committee meetings. Arguments from various interest groups are similar to what has been displayed for a number of years on replacement crash parts programs or panel discussions at NACE.
Clearly, the committee has enough information to make a final decision at the NCOIL annual meeting. In a previous Autoinc. article, we outlined the NCOIL process and what happens after a model bill is finalized by the committee. ASA opposes the current Model Crash Parts bill. If the bill does not undergo significant change, ASA will oppose the bill if and when the bill is offered in a state(s) legislature(s).
The committee offered no clarity as to who would certify aftermarket crash parts and no certification criteria for organizations beyond an American National Standards Institute (ANSI) recognized entity.
The committee's proposed language on consumer consent is too vague and does not protect the vehicle owner. ASA and the automakers have proposed for years that consumers should give "written consent" prior to the use of replacement crash parts. One option ASA suggested at the spring NCOIL South Carolina meeting was to limit the model bill to consumer notice of what parts are being used in the repair and a required written consent, from the vehicle owner, as to the use of those type parts.
The Property-Casualty Insurance Committee did approve a provision, with a unanimous vote, for the Model Act that differentiates certified aftermarket crash parts from aftermarket crash parts. There was no discussion of this provision prior to the vote. ASA opposed this provision. The committee continued its discussion of the Model Act Regarding Insurer Auto Body Steering. ASA opposes the proposed Model Steering Act as it is currently drafted. ASA raised issues regarding the selection of repair facilities provisions. Specifically, the proposed Model Act included no language regarding training, equipment and certifications for repair facilities. In addition, the model's provisions also encouraged a system seeking the lowest common denominator within the marketplace, punishing those shops with higher training, equipment and quality repair standards. Insurer disclosure requirements in the Model Act did not include any information as to shop staff training, equipment criteria or shop certifications.
The Committee will return to deliberations on the Model Steering Act at the fall annual meeting.
It's important that repairers encourage their state legislators, if they have appointments to NCOIL's Property-Casualty Insurance Committee, to oppose the Model Crash Parts bill and the Model Auto Body Steering bill, as drafted. Also consequential to this debate is that the committee should be encouraged to vote on the proposals. Policy positions from all sides have had ample opportunity to be put forth to the committee. Stakeholders have invested a significant amount of resources with these issues and NCOIL. Please note that an NCOIL decision in favor or opposition does not ensure a bill is introduced or not introduced in any state. This is just the earliest, and not the only, piece of the legislative process.
In the coming months, ASA will urge NCOIL to make a final decision on the collision-related Model Acts at its annual meeting in Texas. Collision repairers can go to ASA's legislative website, www.TakingTheHill.com, to review pertinent information on the Model Act proposals.
House Passes Small Business Lending Fund Act
The U.S. House of Representatives recently passed H.R. 5297, the Small Business Lending Fund Act of 2010, by a vote of 241-182.
The bill was introduced by the U.S. House Committee on Financial Services, sponsored by Rep. Barney Frank, D-Mass., committee chairman. If the bill passes the Senate, it will establish a temporary small business lending fund, separate from the Troubled Asset Relief Program (TARP), for banks having total assets of $10 billion or less.
In his testimony before the Committee on Financial Services, Gene Sperling, counselor to the secretary of the Treasury, stated the bill's purpose is to "ensure that small businesses have the ability to access credit, make investments and create new jobs." - Philip Thompson
CA Assembly Bill 350 Dies
The California Assembly Committee on Business, Professions and Consumer Protection allowed Senate Bill 350 to die for this year. At a recent committee meeting, the bill was not addressed.
The bill, regulating aftermarket crash parts, prohibits insurers from mandating the use of non-original equipment manufacturer (non-OEM) aftermarket crash parts (ACPs) unless certain restrictions are met. The restrictions include the following:
• The parts are at least equal to OEM parts in terms of kind, quality, safety, fit and performance.
• The insurer specifying the use of non-original equipment manufacturer aftermarket crash parts shall pay the cost of any modifications to the parts that may become necessary to affect the repair.
• The insurer specifying the use of non-original equipment manufacturer aftermarket crash parts shall warrant that those parts are of like kind, quality, safety, fit and performance as original equipment manufacturer aftermarket crash parts.
• All original and non-original equipment manufacturer aftermarket crash parts manufactured on or after Jan. 1, 2011, when supplied by auto body repair shops, as defined in Section 9889.51 of the Business and Professions Code, shall carry sufficient permanent, non-removable identification so as to identify the manufacturer. - Kaitlyn Dwyer
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.
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