Volume 14, Issue 3 - May/June 2012

legal updates

Decisions Made on Auto Glass Industry Legislation

Auto glass industry legislation continues to make news as the state legislatures make decisions regarding three bills.

In South Carolina, H.B. 4042, a bill designed to prohibit steering, passed out of the committee in the middle of February with an added amendment. The amendment prohibits TPAs from “requiring that repairs be made to the insured’s vehicle in a particular place or shop or by a particular concern.”

In addition, the amendment further provides that TPAs must, on their network lists, “include providers regardless of its opinion of the quality or workmanship of the provider concerned if that provider performing glass repair services will meet all requirements of the policy of automobile insurance issued by the automobile insurer which the third-party administrator represents.”

Safelite, a third-party administrator with retail services, would be affected by the bill. “We are extremely pleased the original version of H.B. 4042 did not pass out of committee,” says Brian DiMasi, Safelite’s senior corporate counsel. “However, an amendment, drafted in part by Scott Taylor of DNS Auto Glass, formerly Coast to Coast Auto Glass, seeks to dismantle preferred provider networks in favor of a ‘provider list.’ Amended 4042 would require every fly-by-night glass shop be included in a ‘provider list’ and then offered to South Carolina consumers on a rotating basis. Dismantling direct repair programs or ‘preferred provider’ networks that offer high quality and low prices, hurts consumers. DNS Auto Glass and other shops that approach people at car washes, gas stations and even in their neighborhoods typically do not participate in traditional networks. Enacting a law that requires insurers to offer their company as an alternative clearly benefits them at the expense of South Carolinian consumers.”

According to a representative from the Senate Banking and Insurance Committee the bill “passed in an amended form” and will be held by the committee until all committee members can come to agreement on the changes. If and when all committee members are in agreement the bill will move forward for a vote in the Senate.

In Arizona, S.B. 1331, a bill that also seeks to prohibit steering, was withdrawn in mid-February. According to a representative from the office of Sen. John McComish, the bill’s lead sponsor, “the bill was withdrawn” after supporters and those opposing the bill agreed to meet and discuss their concerns.

In Michigan, S.B. 306, a bill that could place several requirements on third-party administrators, including the addition of a code of conduct by which those that also provide auto glass services would have to abide in order to maintain both services, passed unanimously out of the state’s Senate at the end of January.

According to a representative from Sen. Joe Hune’s office, the bill is now waiting to be referred to a committee and there is no set timeframe for how long that will take or if it will be brought to a vote. Sen. Hune introduced the bill on March 24, 2011.

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