Repair Procedure Restrictions are Late-Season Legislative Focus

Rhode Island legislation still alive.

Although several states have seen legislation and debate regarding original equipment manufacturer (OEM) repair procedures, companion bills in Rhode Island have gained the most traction.

Senate Bill (SB) 2679, introduced by Senators Maryellen Goodwin, Dominick Ruggerio and Michael McCaffrey on March 20 was followed by House Bill (HB) 8013, introduced by Representatives Kenneth Marshall, Arthur Corvese, James McKierman, Stephen Casey and Carlos Tobon on March 29. Both bills cover several important parts issues, but key to this discussion is their text on OEM repair procedures.

For example, SB 2679 states: “When ‘OEM part(s)’ are used in the repair of a motor vehicle, no insurance company may require any repairer to use repair procedures that are not in compliance with the recommendations of the original equipment manufacturer.”

And HB 8013 contains the following language: “No insurance company may require any repairer to use repair specifications or procedures that are not in compliance with the recommendations of the original equipment manufacturer for those parts.”

In recent testimony to the Rhode Island House of Representatives’ Commerce Committee in support of their OEM repair procedure efforts, ASA stated, “Like its companion legislation, Senate Bill 2679 and House Bill 8013 would prohibit insurers from requiring ‘repair specifications or procedures’ not in compliance with vehicle manufacturer recommendations. ASA stands in strong support of this position.

“The automotive repair industry has evolved from one of generic repairs to one of manufacturer-specific procedures. Too often, undefined ‘industry standards’ are equated with manufacturers’ procedures. When this happens, the shop and the consumer are jeopardized if the repair doesn’t perform like manufacturers’ recommendations. Compliance is not only critical to protect the shops from litigation, but to ensure the safety of the customers. ASA supports HB 8013 provisions prohibiting repairers from using repair specifications or procedures that are not in compliance with OEM recommendations.”

Elsewhere, the Indiana Legislature considered collision repair legislation that eventually saw added repair-procedure language that became a “poison pill” amendment that blocked the bill from moving forward. The language read, “It is a rebuttable presumption that a repair of a motor vehicle is not defective if the repair is made in conformity with: (A) the vehicle manufacturer’s repair procedures; or (B) generally accepted industry standards.”

That “generally accepted industry standards” passage proved to be an anchor to the underlying legislation, and it later stalled in conference.

In Illinois, HB 4926 also affirmed the importance of using OEM repair procedures: “No repair facility or installer may use repair specifications or procedures that are not in compliance with the original equipment manufacturer for those parts unless authorized by the customer in writing.”

Collision Division Director Scott Benavidez, AAM, has summed up the rationale for ASA’s position, saying, “Our industry has evolved from one of generic repairs that could be applied to virtually any vehicle to one of OEM-specific procedures that are make- and model-specific. We believe that strictly adhering to OEM repair procedures is critical, not only for the safety of our customers, but also to protect ourselves from potential litigation.

“By attempting to equate undefined ‘industry standards’ to OEM procedures, we jeopardize the shop and the consumer if the repair doesn’t perform as intended. Collision repairers and consumers should not be put in such a position where legislators are defining a safe and proper repair.

“This fight is far from over,” Benavidez added, “but it’s our understanding this bill is dead for now. It’s a possibility that the amendment language will resurface in the future, and ASA’s COC will continue to monitor all legislation to ensure the interests of ASA, our members and the collision repair industry are represented.”

A number of organizations supported the two Rhode Island bills, including ASA-Massachusetts/Rhode Island. But, clearly, not every industry group agrees with this view of repair procedures.

For example, the Property and Casualty Insurers Association of America opposed SB 2679 and HB 8013 citing:

Rising insurance costs in Rhode Island

A rise in the cost of repair parts of 10.8 percent

A rise in the cost of repairs of 5.2 percent

The Rhode Island Senate passed SB 2679 unanimously. The bill is awaiting consideration on the House floor.

A majority of state legislatures have adjourned for the summer. But in the fall, as states prepare for their 2019 legislative sessions, OEM repair procedure legislation will likely be in the mix.

A related issue for the collision repair industry is pre- and post-scans of collision repaired vehicles. OEM repair procedure policy is outlined on the website OEM1Stop, at oem1stop.com/position-statements. OEM1Stop is a collision repair resource provided by automakers that includes position statements on pre- and post-scan of collision repair vehicles.

General Motors’ position statement on scanning, for example, states: “General Motors takes the position that all vehicles being assessed for collision damage repairs must be tested for Diagnostic Trouble Codes (DTCs) during the repair estimation in order to identify the required repairs. Additionally, the vehicle must be retested after all repairs are complete in order to verify that the faults have been repaired and new faults have not been introduced during the course of repairs.

“Even minor body damage or glass replacement may result in damage to one or more safety-related systems on the vehicle. Any action that results in loss of battery-supplied voltage and disconnection of electrical circuits requires that the vehicle [be] subsequently tested to ensure proper electrical function. Many safety and security-related components, sensors and Electronic Control Units (ECUs) require calibration and/or learns when replaced. These systems must be repaired according to the corresponding GM repair procedures in Service Information (GMSi).”

As part of the repair process, pre- and post-scanning of collision-repaired vehicles remains a likely consideration for public policy debate. And as such procedure policy is discussed at the state level, policymakers also will look at the pre- and post-scan of collision repairs.

In addition, crash parts and related legislation continues to evolve. Dominating the policy landscape is written notice to vehicle owners and, later, written consent for the use of certain parts, whether aftermarket, OEM or recycled. As late as the 2017 state legislative sessions, multiple states were facing efforts to dismantle their crash-parts laws. Several of these states have strong protections for consumers and collision repairers.

At the federal level, most crash-parts efforts have revolved around patent protections in recent congressional cycles. OEM repair procedures have not been as dominant an aspect of the collision repair policy debate. And litigation involving collision shops has encouraged legislation that includes OEM repair procedure protections.

ASA leaders, at May’s ASA Annual Business Meeting in Orlando, Fla., discussed the importance of OEM repair procedure legislation in key states. And states are likely to see more repair-procedure legislation during the 2019 sessions, which will require at least some policy dialogue on pre- and post-scans.

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