Two pieces of aggressive anti-steering legislation introduced earlier this year in the state legislatures of Connecticut and California have undergone significant changes.
In California, a bill that would have placed strict limitations on insurance company repairer recommendations has transformed into one requiring the state's insurance commissioner to convene a task force on steering issues. In Connecticut, the legislature passed a consumer notification bill, while rejecting a stronger bill that prohibited insurers from making repairer recommendations.
On May 7, the Connecticut legislature passed House Bill 5152, an anti-steering bill that requires notice be provided that consumers "have the right to choose the licensed repair shop where the damage to your motor vehicle will be repaired." The bill also requires insurers using a direct repair program to obtain written acknowledgement from the consumer that he or she is aware of their right to choose a repair shop.
Connecticut Senate Bill 288, which was supported by the attorney general and the Auto Body Association of Connecticut (ABAC), failed to pass during this session, and is unlikely to be taken up again in light of the success of HB 5152.
SB 288 was introduced by Attorney General Richard Blumenthal, and would have amended the state's anti-steering law to say that "no insurance company ... shall recommend, request or require any insured to use a specific person for the provision of automobile physical damage repairs, glass replacement, glass repair service or glass products."
It also would have required appraisers to include language on appraisals that would inform customers of their right to choose a repair facility, similar to the requirements of HB 5152.
The Property Casualty Insurers Association of America (PCI) submitted written opposition to SB 288 to the Connecticut legislature.
"It got squashed in committee," says Tom Bivona, outgoing president of ABAC. "[HB 5152] is basically what we had agreed on last year. We were able to get some changes in it by having the owner of the vehicle sign a document saying that they've been informed that they have the right to choose a repair shop, which is a step in the right direction."
The passage of HB 5152 instead of the stricter Senate bill was generally applauded by the insurance industry, which characterized the Senate bill as overly prohibitive.
"Consumers should have the ability to make informed choices regarding vehicle repairs, and HB 5152 supports that right," says Paul Magaril, regional manager and counsel for PCI. "The Insurance Committee's approach enables insurance companies to continue to provide customers with direct repair options that can offer a hassle-free experience and other benefits and services. This legislation is a positive development and a vast improvement over the attorney general's bill that would have hampered customer service, limited consumer choice, increased costs and ultimately forced motorists to pay higher premiums."
"Overall, AIA is very pleased with the outcome of the session," says Laura Kersey, Northeast Region assistant vice president for the American Insurance Association (AIA). "The industry was successful in defeating a number of proposals that would have had a negative impact on consumers and insurers. Prohibiting insurers from offering auto repair programs that are designed to provide a quality, hassle-free repair process would have harmed consumers by preventing knowledge of options, alternatives and choices."
Bivona says ABAC plans to focus on paint and material and aftermarket parts issues during the next legislative session, under the leadership of new association president Bob Skrip of Skrip's Auto Body.
In California, Senate Bill 1167 has undergone a significant transformation from an anti-steering measure to a call for the state insurance commissioner to convene a task force to study the issue.
Introduced in March by State Senator Pat Wiggins (D-Santa Rosa), SB 1167 originally would have prohibited insurers from suggesting alternative repair choices to consumers if they had already selected a repairer.
The bill was sponsored by the Collision Repair Association of California (CRA) and supported by the California Autobody Association and New Car Dealers Association.
The current version of the bill requires the insurance commissioner to convene a task force that includes representatives from the insurance industry and consumer protection groups to "review issues arising from the implementation of a specific automobile repair anti-steering statute," and to present their findings in writing to the legislature by Dec. 31, 2009.
While the CRA supports the bill, the group expressed concern that "the task force called for in this bill might slow down the current efforts of the [insurance commissioner] to promulgate regulations that hopefully will lead to meaningful enforcement of the anti-steering law."