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SCRS Releases Statement About State Farm, PartsTrader Lawsuit

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Sept. 9, 2013—The Society of Collision Repair Specialists (SCRS) issued a statement Sunday firmly establishing its position against mandatory business requirements imposed on collision repair shops by insurance providers.

“The Society of Collision Repair Specialists (SCRS) takes exception to business mandates that property and casualty insurers impose upon collision repair businesses; particularly those that specify required vendors, business platforms or internal processes that must be followed in order to be included in, or avoid being excluded from, certain lines of work,” the statement read.

In a recent lawsuit filed by two dozen Mississippi body shops against State Farm Insurance and PartsTrader, shop operators claim that State Farm’s requirement to purchase replacement parts from PartsTrader’s online platform damages businesses by eliminating previous relationships with part suppliers and causing increased cycle time while shops wait for parts to ship across country.

The requirement is only for shops that are a part of State Farm’s direct repair programs in select markets.

The SCRS’s position statement, in its entirety, is as follows:

“In representation of collision repair businesses across the United States, The Society of Collision Repair Specialists (SCRS) takes exception to business mandates that property and casualty insurers impose upon collision repair businesses; particularly those that specify required vendors, business platforms or internal processes that must be followed in order to be included in, or avoid being excluded from, certain lines of work. As an example, insurer mandates surrounding parts procurement platforms may inhibit independent collision repair businesses from utilizing parts vendors with whom they have an existing relationship, providing insurers with greater influence and control over the parts supply chain. SCRS believes this control falls outside of the scope of the insurance business. Some insurers are stipulating agreement to these terms, as a condition of being recognized in Direct Repair Programs (DRP). SCRS supports efforts that rightfully seek to eliminate such intrusion into the collision repair business, and enforcement of existing laws, regulations and codes that currently prohibit such actions. It is the opinion of SCRS that voluntary agreements cannot include stipulations which violate existing laws, rules and regulations.

“SCRS believes that collision businesses are capable of establishing successful vendor relationships and internal processes that will best accommodate the needs of the consumer, and that service providers will continue to respond to the market with increasingly creative solutions that drive performance for their customers and the respective market entities. We believe that solutions with tangible value propositions will be utilized and supported by the marketplace without the undue influence of insurer mandate.”
 

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