PCI lawsuit challenges anti-steering law

The Property Casualty Insurers Association of America (PCI) is challenging the constitutionality of Rhode Island's Anti-Steering Act, which prohibits auto insurers from recommending body shops to customers and third-party claimants after they have selected a repair shop.

PCI sued the state's Director of Business Regulation Paul McGreevy and Attorney General Peter Kilmartin in Federal Court.

Rhode Island's Anti-Steering Act states: "The insured or claimant shall be promptly informed by the insurer of his or her free choice in the selection of an auto body repair shop. Once the insured or claimant has advised the insurer that an auto body repair shop has been selected, the insurer may not recommend that a different auto body repair shop be selected to repair the automobile." Click here to see the state's insurance bulletin.

PCI said, "This ban interferes with the ability of the insurer not only to communicate with claimants generally, but also communicate with their customers, the insureds, regarding repair options and benefits that these insureds have paid for through insurance premiums, thereby unconstitutionally prohibiting truthful commercial speech related to a lawful activity."

In 2005, Rhode Island expanded on its Anti-Steering Act by saying that insurers must promptly inform insured parties of their free choice in selecting an auto repair shop, and soon after ask claimants if they have selected a shop, according to Courthouse News.

To see the entire article, click on Courthouse News.