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Monday, 05 March 2007 11:49

B.A.R. rescinds cease and desist order to Progressive Insurance

    The California B.A.R. has rescinded the Cease and Desist Order it issued to Progressive Insurance over operation of its San Diego Concierge facility, this according to Jack Molodanof, the longtime Sacramento lobbyist for the Cali-fornia Autobody Association (CAA). Molodanof made the announcement at the CAA annual convention in Anaheim on February 10.
    The B.A.R. had issued the Cease and Desist Order last year when it investigated complaints and initially determined that Progressive was performing work at its San Diego claims office that required a B.A.R. registration. Progressive still refused to register with the B.A.R., its lawyers arguing that the work done at the facility in estimating collision damage did not constitute automotive repairs. Progressive receives vehicles at the claims center, estimates damage and selects a body shop to make the repairs. Customers then pick up the completed vehicle at the Progressive claims center.
    “The B.A.R. apparently accepted the argument that they (Progressive) were not tearing down or repairing vehicles,” Molodanof told the crowd of CAA members. “We are not sure if what they (Progressive) are doing is legal or not.” Molodanof also noted the rumor that Progressive, emboldened by the B.A.R.’s latest action, is looking to acquire properties in eight California markets.
    The CAA convention, held at the Disneyland Hotel, marked the organizations 40th anniversary. Executive Director David McClune told the over 100 attendees that 115 new shops joined CAA in 2006, growing membership to around 1,000. New corporate sponsors include Avis-Budget, Profit Tool and Honda.
B.A.R. programs cause concern
    Lobbyist Molodanof announced that the association is taking action in Sacramento on several fronts, especially on two B.A.R progams: the newly reimplemented autobody repair inspection and the proposed “cite and fine” regulations. The new B.A.R. chief, Sherry Mehl, has reimplemented the program in which the B.A.R. will inspect auto body repairs whenever requested by a consumer. The program was explained in a recent letter from Mehl to all registered body shops. A similar program made headlines three years ago when the inspections disclosed what the B.A.R. referred to as fraud in auto body repair. Much of the so-called fraud consisted of errors in completing repair orders and invoices to B.A.R. standards. In explaining why the CAA is not in favor of restarting this program, Molodanof said, “We strongly support true anti-fraud measures, but we don’t want to criminalize people who just made mistakes.” The last rounds of reinspection resulted in claims that up to 40 percent of body repairs included fraud.
    Also of concern is the new B.A.R. chief’s proposal that B.A.R. inspectors be allowed to cite shops for violations of B.A.R. rules and issue fines. Presently, inspectors will cite a shop for violations and provide information on how to correct them. Only repeated violations generally lead to further actions such as shutting down a shop. “Cite and fine won’t work in our business,” said Molodanof, “because the issues aren’t black and white like in other businesses.”
    As an example of black and white, he cited the restaurant industry where health inspectors can stick a thermostat in dishwater to see if it is hot enough. “The only thing black and white with us is the paperwork, so that’s what they would focus on.” The CAA has met with B.A.R. chief Mehl to seek a compromise and is hopeful one can be worked out.
Meeting with Dept. of Insurance
    CAA is also working with the office of the new insurance commissioner, Steve Poizner. CAA wants the meeting to focus the DOI’s attention on enforcement of existing laws, including those on insurers steering work to DRP shops and illegal capping of paint and materials. The DOI is also developing new regulations for labor rate surveys; the proposed regulations were developed in consultation with the CAA and include prohibiting the use of DRP shops in a labor rate survey. Those regulations were submitted for review to the Office of Administrative Law, which “kicked them back to DOI” according to Molodanof. DOI must now modify the proposed regulations or drop them.
    CAA also expects that a bill sponsored by CAPA on the certification of aftermarket parts may be brought up in Sacramento. “It’s poorly drafted and not very clear as to its intentions, but we’re watching it,” said Molodanof.
Legislative Day March 27
    March 27 is Legislative Day in Sacramento for CAA members. Members will meet in Sacramento in the morning for a briefing, then spend the afternoon meeting with legislators to discuss industry issues. For details on this and all CAA activities visit, www.calautobody.com.
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