Friday, 23 April 2010 16:01

Pennsylvania Senator Rafferty Asks for Investigation after Steering Experience

Pennsylvania Senator John C. Rafferty Jr. (R) has introduced Senate Resolution 254 calling on the state’s insurance commissioner to investigate the practice of steering by insurers in the collision repair industry and report his findings back to the legislature.

SR254 was introduced on Feb. 26 and reads: A resolution urging the Insurance Commissioner to investigate the prevalence of the practice by which motor vehicle insurers coerce or otherwise attempt to aggressively direct their insureds who have filed claims for damaged motor vehicles to use motor vehicle repair shops that have been preapproved by the insurer or that are affiliated with the insurer, thereby restricting or adversely affecting the choice of the insureds to select repair shops of their own choice.

Rafferty experienced insurer steering firsthand following a collision with a deer last year. He introduced the resolution following a hearing days before during which he told Insurance Commissioner Joel Ario, “I’m finding it very disturbing that this is happening.”

Rafferty said, “Five or six individuals who own auto repair shops have told me that insurance companies are aggressively turning [customers] to what they’re calling their preferred shops... individual shop owners are starting to lose business.”

The resolution urges the Insurance Commissioner “to investigate the prevalence of the practice by which motor vehicle insurers coerce or otherwise attempt to aggressively direct their [insureds] to use motor vehicle repair shops that have been preapproved by the insurer or that are affiliated with the insurer, thereby restricting or adversely affecting the choice of the insureds to select repair shops of their own choice.”

Referring to the issue as a “serious problem,” Rafferty said in a hearing prior to the resolution’s introduction that, “I think this is something that we have to get a handle on and tell the insurance companies to back off.”

The bill has been assigned to the Senate Banking & Insurance Committee on which Rafferty serves.

Rafferty, an attorney that previously served as Pennsylvania’s Deputy Attorney General, represents parts of Berks, Chester and Montgomery counties just outside the city of Philadelphia.

The resolution, if passed, would require the Insurance Commissioner to report the findings of its investigation to the General Assembly within six months of the adoption of the resolution.

In an unrelated matter, the Pennsylvania Collision Trade Guild wrote to PA commissioner Joel Ario asking that “structural crash parts (i.e. front and rear bumpers, bumper brackets, energy absorbers, structure members etc.), manufactured by other than the original equipment manufacturers (OEM)” be recalled, and where necessary, re-repairs be undertaken to return affected vehicles to their pre-loss condition relative to safety and performance.”

The letter referenced the California CRA request for a recall.

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