Wednesday, 25 June 2014 20:54

Rhode Island Bills Under Consideration Affect Airbags, Two-tiered Body Shops, Aftermarket Parts

By Rhode Island standards, this year’s entry in the automobile insurers versus repair shops category is a minimalist one. Nonetheless, a series of bills in ongoing tug-of-war between the auto body and insurance industries in Rhode Island are ongoing and were heard by the Rhode Island Senate Committee on Judiciary June 5.
The bills are co-sponsored by North Providence Sen. Dominick Ruggerio, majority leader from District 4. Corresponding bills from North Providence Rep. Arthur Corvese have also been referred to committee in the House.
The following are some of the bills up for consideration:
● S2833 prohibits insurance companies from mandating use of used or remanufactured airbags or suspension parts. It would prohibit insurance companies from requiring the use of used or remanufactured airbags and/or suspension parts when vehicle repairs are made by an auto body shop.
● S2834 establishes a two-tiered licensing system for body shops. It creates two distinct license classifications and labor rate surveys for auto body repair shop facilities, basically meaning different pay for different shops.
● S2835 extends regulations on aftermarket auto body replacement parts to any automobile replacement part. It amends the definition of the term “aftermarket part” to refer to all motor vehicle replacement parts.
● Another would eliminate the process that allows filings by casualty insurers seeking rate increases or decreases of not more than 5 percent to become effective when filed, essentially taking away the ability of insurers to increase rates without a hearing, according to Jina Petrarca-Karampetsos, spokeswoman for the Auto Body Association of Rhode Island (ABARI) and daughter of Providence Auto Body owner John Petrarca.
ABARI is backing the license classification bill, the aftermarket parts bill, and the insurance notice bill as “good consumer” pieces of legislation, said Petrarca-Karampetsos. She told The Breeze that ABARI members are “as confident as we always are” that state lawmakers will wonce again “support the consumer” as they’ve done historically.
The Property Casualty Insurers Association of America is opposing all four above pieces of legislation, calling them “bad bills” that will take more money from average Rhode Islanders.
Ruggerio and Corvese have declined to discuss any of their bills with media.
Frank O’Brien, vice president of state government relations with the Property Casualty Insurers Association of America, said the continued campaign by Ruggerio and and Corvese—lawmakers he says have supported a combined 17 bills supported by ABARI over the past decade—is having a cumulative negative impact on consumers, helping to cause some of the highest insurance rates in the country to balloon further.
The insurance notice bill on June 5’s docket is unique in that it doesn’t relate to auto body issues, said O’Brien, but is “more related to sour grapes.” Rhode Island is one of 14 states that has a “flex-rating” statute in place allowing an expedited rate filing process for insurers if the size of the increase is 5 percent or less.
According to O’Brien, less than 10 percent of rate filings actually take advantage of the statute. Having the statute in place has actually resulted in lower rate increases, said O’Brien. Without it, insurers may be reluctant to change their rates in response to competition.
The National Association of Mutual Insurance Companies issued the following news release:
The National Association of Mutual Insurance Companies provided testimony to the Senate Judiciary Committee opposing S. 2834 that would create a dual licensing classification system for auto collision repair shops.
“The legislation is totally unnecessary,” said John Murphy, NAMIC’s state affairs director for the Northeast. “If the auto body repair industry wants to create a classification system, it can do so without involving the Legislature in its marketing strategies.”
According to Murphy, the Legislature has appropriately identified the minimum standards that all auto collision repair shops should meet in order to protect consumers and shop workers. “Any bells and whistles beyond that should be left up to individual shops,” he said.
Details of bills and amendments are available online:
http://webserver.rilin.state.ri.us/BillText/BillText14/SenateText14/S2833.pdf.
http://webserver.rilin.state.ri.us/BillText/BillText14/SenateText14/S2835.pdf.
http://webserver.rilin.state.ri.us/BillText/BillText14/SenateText14/S2834.pdf.

The NAMIC letter is available at:
http://www.namic.org/pdf/14memberadvisory/140605_RIautoBodyRpr.pdf

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