Michigan Bill Addresses Insurer-Mandated Parts Procurement

Legislation designed to protect consumers and repairers.

The Automotive Service Association’s (ASA) recent efforts on behalf of one issue of specific interest to automotive repairers in Michigan might soon pay big dividends to ASA members and nonmembers alike in that state.

In response to ASA’s work with state legislators, State Sen. Joe Hune (R-22), chairman of the Senate Insurance Committee, has introduced Senate Bill 430 that would amend the insurance code to prohibit insurers from requiring automotive repairers to use a specific vendor or process to procure parts and other materials.
If enacted, the legislation would effectively end all such requirements in current direct-repair program agreements for Michigan shops. Hune’s bill is now before the Committee on Insurance for further consideration. If enacted, it would go into effect within 90 days.

“The bill would continue to allow repairers to choose their parts procurement systems and their parts vendors as they currently do with a majority of their customers’ insurance carriers,” says Ray Fisher, president of ASA-Michigan. “In turn, this would continue to increase efficiency for the automotive repair process by supporting local parts vendors and ensuring quality parts for consumers.”

ASA President Dan Risley echoed Fisher’s comments. “ASA has communicated our concerns with mandatory parts procurement to the industry,” Risley says. “We believe that direct repair program mandates to use specific vendors to purchase parts and/or third-party software applications adversely impact collision repairers and consumers.

“When you allow repairers the freedom to choose the best means to efficiently operate and manage their business and the claim, it benefits all the stakeholders (insurer, repairer and the consumer). This bill would allow collision repairers to identify and select the best vendors to purchase and source parts. More importantly, it would foster healthy competition among parts vendors and third-party software providers where the best product and service would prevail. A free and open marketplace always results in better product and service.”

To review S.B. 430 and related issues, go to ASA’s legislative website, www.TakingTheHill.com. And for additional information about ASA, including past media releases, go to www.ASAshop.org.