The Rhode Island Supreme Court will decide whether or not to hear the appeal on Oct. 23.
In August, Rhode Island Superior Court Judge Netti C. Vogel ruled that state law requires every insurance carrier in the state to conduct a labor rate survey and to use that data as the sole factor in determining rates.
“PCI believes that the judge has committed several errors of law,” says Frank O’Brien, vice president and regional manager for PCI. “The judge has not interpreted the statute properly, and we believe that she erred by not deferring to the DBR’s unique knowledge and experience in this area.”
O’Brien said that Providence Mutual Fire Insurance, Amica Mutual, the National Association of Mutual Insurance Companies (NAMIC), and the American Insurance Association (AIA) have also filed amicus briefs in the case “suggesting some constitutional problems and other issues.”
The labor rate survey statute requires that insurance companies with more than 1 percent of the market to use a standardized form to survey body shop labor rates. Facilities with direct repair program agreements with insurance companies are excluded from participating in the surveys.
Prior to the August ruling, the DBR and insurers had interpreted the statute to mean that labor rate surveys could be just one of several elements used to determine the prevailing rate. The Auto Body Association of Rhode Island (ABARI) filed a petition with the DBR asking for a declaration that the labor rate surveys would be the sole determinant of rates in Rhode Island, which the department rejected. ABARI appealed that decision to the Superior Court, and PCI made a filing in the case asking the court to affirm DBR’s decision.
PCI filed a motion for clarification, asking the judge to alter the language of the August ruling. Judge Vogel reaffirmed her original decision, prompting the appeal.
The DBR issued a bulletin to insurers on Sept. 18 instructing those required to file surveys under the original regulation to do so by Sept. 26. According to the bulletin, “the filings should be made in accordance with Insurance Regulation 108 and do not need to be modified to conform with the Superior Court Decision.”
“There has been a stay of the judge’s decision, and that stay is in effect until Oct. 23,” O'Brien says. “Companies which were previously required to comply with the provisions of the regulation were required to file their surveys. In the meantime, we're all waiting to see what color smoke will come out of the courthouse in Providence.
ABARI’s attorney, Jina Petrarca-Karampetsos, declined to speculate on whether or not she believed the Supreme Court would hear the case, but she said that the group remained optimistic that they would ultimately prevail. “I’m still confident the judge’s decision will be upheld,” she said.
