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  Legislative Feature

Variations in Property, Casualty Insurance Impact Consumers, Repairers

Posted 9/17/2012
By Robert L. Redding Jr.

California DOI proposes new autobody regulations.

As Congress winds down its 112th session, what may be more telling for the collision industry is the lack of action on significant public policy related to collision repair versus any new law’s impact on repairers. Unlike the 111th Congress, the interest in insurance reform by the House Financial Services Committee and the Senate Banking Committee has been very limited. The focus in the past 18 months has been on reviewing the Dodd-Frank Wall Street Reform and Consumer Protection Act, which attempted to address concerns about the financial services industry but barely touched on insurance reform. There has been little activity on addressing insurance reform in this Congress.

The Automotive Service Association (ASA) worked with both Republicans and Democrats on these committees of jurisdiction to make some inroad for reform of the property and casualty insurance industry in the 111th Congress. ASA has also been a longtime supporter of the repeal of the McCarran-Ferguson Act; recent efforts in the Congress have been limited to a repeal restricted to health insurers only. The most vocal Senate advocate is Patrick Leahy (D-Vt.). chairman of the U.S. Senate Judiciary Committee. Rep. Gene Taylor (D-Miss.) was not re-elected in 2010 but had previously been the loudest House voice on McCarran repeal. Rep. Paul Gosar (R-Ariz.), an Arizona dentist, has been the most active in the House of Representatives, during this Congress, to repeal McCarran. As a health-care provider, Gosar has firsthand knowledge of the frustrations experienced by small businesses when relying on the insurance industry as an under-regulated partner in his business.

Senior property and casualty insurance reformers still hold key positions in the Congress. Rep.
Ed Royce (R-Calif.), who led the reform fight during the financial services reform legislation in the 111th Congress, is the fourth-ranking member of the House Financial Services Committee. He is also being considered for the chairmanship of the committee for the 113th Congress.

In the Senate, Sen. Tim Johnson (D-S.D.) chairs the Senate Banking Committee, which has jurisdiction over insurance reform. Johnson was the Senate sponsor of the insurance reform bill in the last Congress. ASA supported both Royce’s and Johnson’s legislation.

It is unlikely for the Congress to seriously consider any insurance reform legislation until the new Federal Insurance Office (FIO) at the U.S. Department of the Treasury gives some guidance as to the need for the federal regulation of insurance. In the Dodd-Frank legislation, the FIO was tasked with providing Congress a report that included guidance on the federal regulation of the insurance industry. Although the FIO is not a regulator, it is a first step toward more federal involvement in the insurance industry. ASA has supported the federal regulation of the property and casualty insurance industry.

Collision repairers and consumers continue to be subjected to wide swings in property and casualty public policy. Each state insurance commissioner and legislature has an opportunity each year to come up with new initiatives or, in many cases, avoid addressing critical consumer and small business concerns related to property and casualty insurance. For example, Ohio is one of the few state legislatures still in session but could hear more testimony and possibly act on salvage pool legislation this year. The bill, under consideration, broadens the state licensing process for bidding on salvage vehicles. ASA opposes this legislation. Similar bills have been introduced in other states. Arkansas, for example, has this new salvage pool policy as law. Many states do not.

Recently in California, the insurance commissioner has proposed changes to existing regulations that address “how insurers are to handle partial losses for automobile insurance claims settled on the basis of a written estimate prepared by or for the insurer.” In addition, the proposed regulation engages in new aftermarket parts policy.

The California Department of Insurance stated, “After several years of evaluating this law and investigating complaints from the consumers and auto repair shops, the Department of Insurance has concluded that disputes regarding the true costs of repairs of damaged vehicles and applicable repair standard required to comply with the current regulation continue to negatively affect the claims handling process. Additionally, the aftermarket parts that are not compliant with the current regulations continue to infiltrate the repair process threatening public safety. The department is also aware of substantial costs borne by auto repair shops and their customers associated with installing defective or poorly fitting parts required by insurers.”

 The amendments to current California law are intended to address these issues. The Associa­tion of California Insurance Com­panies (ACIC) opposes the proposed regulation. ACIC is the California arm of the national Property Casualty Insurance Association.

California DOI’s effort is intended to protect consumers and collision repairers. Most states have little policy related to the use of aftermarket crash parts. ASA was successful in seeing a handful of states move forward with a notice and consumer written consent legislation years ago but the dominant policy in states is a simple consumer notice requirement. These notices, in many cases, are buried in the original insurance policy so consumers have little knowledge of what they have signed up for in a collision repair and the control the insurer has in the repair process.

These are just a couple of recent examples of collision repair state policy that run the table as to how they impact consumers and repairers. We have seen that federal regulators can have a positive impact on our industry with the recent implementation of the auto refinishing regulation by the U.S. Environ­mental Protection Agency. This new federal regulation gives repairers a baseline for equipment, training and recordkeeping whether a shop is in Florida or Utah with regard to refinishing products.

The new Congress will return in early 2013. ASA will again bring repairers to Capitol Hill to argue for insurance reform and the repeal of the McCarran-Ferguson Act. Collision repairers are encouraged to participate in ASA’s reform efforts. To view more on legislation mentioned in this article, please to go ASA’s legislative website,


Taking the Hill

House Energy and Commerce Subcommittee Holds Clean Air Act Forums

The House Committee on Energy and Commerce Subcommittee on Energy and Power held forums recently on the Clean Air Act. The forums were held to examine state, local and federal cooperation with the Clean Air Act.

It is hoped the forums will provide an opportunity for members of Congress to hear different perspectives from experts about their experiences in implementing the Clean Air Act.

Speakers at the forums included Collin O’Mara, secretary of the Delaware Department of Natural Resources and Environ­mental Control; Henry Darwin, director of the Arizona Department of Environmental Quality; Steve Herrera, executive officer of the Southern Ute Indian Tribe; John Paul, director of Dayton Regional Air Pollution Control Agency; Dr. Barry Wallerstein, executive officer of South Coast Air Quality Management District; Robert King, deputy commissioner of South Carolina Department of Health and Environmental Control; Jeff Littlejohn, deputy secretary for Regulatory Programs at Florida Department of Environmental Protection; and Brad Poiriez, air pollution control officer of the Imperial County Air Pollution Control District.

The forums addressed state, local and tribal experiences surrounding the implementation of the Clean Air Act, accurate permitting for business activities, balancing environment protection and economic growth, reasonable and effective state implementation plans that work in cooperation, and both state and interstate air pollution coordination.

– Kaitlyn Dwyer

Bob Redding 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

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