Michigan Bill Addresses Insurer-Mandated Parts Procurement
July 2, 2015—On Wednesday, Michigan State Sen. Joe Hune (R-22), chairman of the Senate Insurance Committee, introduced Senate Bill 430, which amends the insurance code to prohibit insurers from requiring automotive repairers to use a specific vendor or process to procure parts and other materials. If the bill passes, this legislation would effectively end all such requirements in current direct-repair program agreements for Michigan shops.
The bill was introduced in response to the Automotive Service Association’s (ASA) advocacy efforts in the Michigan legislature.
“ASA has communicated our concerns with mandatory parts procurement to the industry. We believe that direct repair program mandates to utilize specific vendors to purchase parts and/or third-party software applications adversely impacts collision repairers and consumers,” said Dan Risley, ASA president. “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 will allow collision repairers to identify and select the best vendors to purchase and source parts. More importantly, it will foster healthy competition among parts vendors and third party software providers where the best product and service will prevail. A free and open marketplace always results in better product and service.”
S.B. 430 is currently before the Committee on Insurance for further consideration. If enacted, the bill will go into effect within 90 days. To review S.B. 430, go to ASA’s legislative website.