“Our message was clear, concise and well-received—steering happens every day, it hurts consumers and it’s clearly illegal,” said Gene Crozat, CRA president. “We told legislators we want the laws enforced and they definitely heard us.”
Legislators to look into BAR regulatory action against Progressive
Collision repair facility owners from around the state had 25 legislative appointments throughout the day on March 14 with some producing immediate action. After meeting with a contingent of seven CRA members, one legislator promised to find out why the Bureau of Automotive Repair (BAR) withdrew its regulatory action against Progressive’s Concierge Program in San Diego.
In August, 2006 the BAR ordered the insurer to obtain a BAR license based on inspections showing that the insurer was engaged in automotive repair work. Progressive refused. The CRA filed a writ in October demanding that BAR enforce its own action. After a shake-up in BAR personnel, the order was quietly rescinded in December 2006. In asking legislators to help find out the reasons why BAR axed its own order, the CRA members said they are seeking a level playing field.
CRA speaks out against steering
“The Concierge Program is hybrid steering,” added Allen Wood, CRA executive director. “We are asking Progressive to register with the BAR, however, statements from the insurer indicate it doesn’t want to take on the liability involved with vehicle repair.”
Paint capping to be examined as well
Legislators were also receptive to investigating the insurer practice of capping prices on paint and materials. CRA members reported that while legislators’ knowledge of how steering works was low at the start of the day, their willingness to help stop it was high.
“Legislators understood the importance of establishing a business environment where quality repair work is done without pressure to use inferior parts in order to save money at the policyholder’s expense,” added Crozat.
New labor rate rules look good…for now
In other CRA-related news, The Department of Insurance’s new amendments to its already proposed labor rate survey regulations were released March 13. However, the initial comment deadline of March 29 was quickly withdrawn in favor of a 90-day extension to provide the department with more time to study the issue.
The proposed changes could be modified by the department prior to submitting them to the Office of Administrative Law for review, said Richard Steffen, CRA’s director of Legislative Affairs.
The new language features a provision that appears to authorize the department to use labor rate survey information in settling disputes between insurers and repair facilities over the reasonable cost of repairs.
Another provision would sanction a posted labor rate that is also submitted to the insurer as part of its labor rate survey. Steffen said the department’s new language is headed in the direction fought for by CRA members, however, the language is subject to change. The CRA met with Insurance Commissioner Steve Poizner on March 26 to discuss labor rates and related issues.