ASA-Michigan Board Objects to Some Insurer Mandates

Statewide forum focused on MFN clauses, State Farm PartsTrader rollout.

Recently, the Automotive Service Association of Michigan held a well-attended Collision Repair Forum in Lansing, Mich., regarding State Farm’s PartsTrader rollout and Most Favored Nation (MFN) clauses. Collision repairers from across the state expressed frustration with insurer mandates. The two mandates of most concern were Most Favored Nation clauses and the State Farm PartsTrader program.

MFN clauses are anti-competitive clauses that put both consumers and collision shops at a disadvantage by guaranteeing a customer will receive prices that are at least as favorable as those provided to other buyers of the same seller, for the same products or services.

Under the State Farm PartsTrader national program, which will be completed by 2014, State Farm requires shops participating in its Select Service program to use PartsTrader’s software to electronically order parts.

ASA-Michigan called a special meeting to address insurer mandates. Its board voted to pursue efforts to stop the use of some insurer mandates, specifically State Farm’s PartsTrader program and Most Favored Nation clauses in their state. Michigan has already banned the use of Most Favored Nation clauses by health insurers.

Ray Fisher, president of ASA-Michigan, said: “Our board has heard from collision repairers all over the state asking our association to work with policymakers to stop the use of MFN clauses and the mandate of the State Farm PartsTrader program in Michigan. In addition, the Michigan board immediately updated its position statement from 2002, which addressed open platforms for estimating to be all-inclusive: ASA-Michigan has always believed in a free market business environment for the automotive service repair industry. ASA-Michigan condemns any mandates made by an insurance company that impact the freedom of choice by a licensed automotive repair facility when servicing their customer.”

Dan Risley, ASA executive director, said: “Collision repairers in Michigan have echoed what ASA is hearing in other states – that the State Farm PartsTrader program and Most Favored Nation clauses are two insurer mandates that go too far. ASA saw this same collision repairer reaction with insurer-owned shops several years ago and we witnessed it again at the ASA-Michigan meeting; there are boundaries in protecting your business and these two insurer mandates cross those boundaries.”

ASA encourages members to visit its legislative website at www.Taking TheHill.com for more on MFN clauses and the State Farm PartsTrader proposal.