ASA Seeks Ban of Most Favored Nation Clauses

April 1, 2013—Michigan Governor Rick Snyder recently signed Senate Bill 61 and Senate Bill 62 into law, which prohibit Most Favored Nation (MFN) clauses in health insurer contracts.

Although the legislation did not address property and casualty insurers, the Automotive Service Association (ASA) is urging the U.S. Department of Justice (DOJ) to consider a ban on MNF clauses for automotive insurance contracts as well.

In September 2012, the ASA participated in a DOJ and Federal Trade Commission workshop on MFN clauses, which appear in a number of agreements offered by national insurance companies. Following the workshop, the ASA sent a letter to the assistant attorney general for the DOJ's Antitrust Division asking for a review of these clauses due to the potentially anti-competitive impact on collision repair shops.

“Although this legislation does not include property and casualty insurers, it supports ASA’s position that MFN clauses can harm consumers,” said Ron Pyle, president and chief staff executive of the ASA. "We are going to continue to work with the Department of Justice as well as state legislators to educate them on the negative impact they have upon the consumer and the entire collision repair industry.”

To view information related to the bills, visit the ASA's legislative website, takingthehill.com.