Dec. 2, 2015—A hearing was held on Wednesday on the mandatory parts procurement bill introduced in Michigan by Senate Insurance Committee Chairman Joe Hune (R-22).
At the meeting, the Automotive Service Association (ASA) called for support of Senate Bill 430, which prohibits insurance companies from requiring the use of mandatory procurement systems and limiting the choice of parts vendor(s) by automotive repair shops.
If passed, the bill will protect free-market competition among parts providers by allowing shop owners to do business with the vendors of their choice.
Statement from Dan Risley, president of ASA:
“Insurer mandated parts procurement systems are harmful to collision repair shops and to local parts vendors. Auto repair shops have worked for many years to develop relationships with local automotive parts vendors. Insurer parts mandates eliminate this economically significant parts purchasing relationship. Cost savings in automotive repair such as local delivery versus overnight charges increase the cost of the repair. Since a pre-existing relationship doesn’t exist and the vendor doesn’t have the majority of the shop’s business, standard service level agreements aren’t in effect. Shops will experience delays in receiving parts, in the frequency of deliveries, in processing returns and in parts accuracy. Mandatory parts procurement systems can add a significant amount of administrative time to the claims process as opposed to using one of their preferred vendors for parts.”
For more information, visit ASA’s legislative website.
