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Wednesday, 22 April 2015 00:00

CDI Holds Pre-Notice Public Discussions Regarding Labor Rate Surveys & Anti-Steering Regulations

The California Department of Insurance held two pre-notice public discussions in April regarding contemplated Labor Rate Surveys and Anti-Steering Regulations. Autobody News recently spoke to Geoffrey Margolis, Deputy Commissioner with the California Department of Insurance, about the discussions.

Margolis said the informal discussions were held between the department and interested stakeholders in Los Angeles on April 3 and in Sacramento on April 16.

Approximately 60-70 representatives from the insurance industry and the collision repair industry attended each.

“The commissioner is considering issuing regulations that pertain to labor rate surveys and steering,” said Margolis. “The purpose is to ensure that the labor rate survey used by insurance companies to settle insurance claims are done in a fair and reasonable manner.”

Margolis said the discussions were held to receive feedback from interested stakeholders about how to best address the issues.

“The department will then take the information it received at the pre-notice public discussions as well as any other information it has on the issues and advise the commissioner as to whether or not to proceed to issue a regulation,” said Margolis. “We’re so early in the process we want a free flow of information between the department and those outside of the department.”

The Department of Insurance outlined the benefits to the contemplated Auto Body Labor Rate Surveys Regulation and Anti-Steering Regulation below: 

The benefits to the contemplated Auto Body Repair Labor Rate Surveys Regulation are:

  1. The fair and equitable settlement of claims involving auto body labor repair rates.
  2. Prevent insurers from improperly deflating claims using invalid labor rate surveys.
  3. Provide consumers accurate, truthful, and consistent information during the insurance claims process when their automobiles are repaired at auto body repair shops.
  4. Provide clear and reliable standards to insurers for use when conducting auto body labor repair surveys.
  5. Ensure that consumers are not forced to bear the costs of reasonable auto collision repair labor rates that go unpaid by insurers.
  6. Ensure that insurers do not deflate auto body repair labor rates by biased sampling or surveying auto body shops with a discounted or lowered rate for which the insurer has previously contracted.
  7. Ensure that insurers use specified consistent and pre-defined geographic areas so that shops within other geographic areas with lower labor rates are not included in the survey rate for the area in question.

The benefits to the Anti-Steering Regulation are:

  1. Prevent insurers from making untruthful and deceptive statements that unreasonably influence a claimant’s right to select their auto body repair facility.
  2. Prevent insurers from making untruthful and deceptive statements during the claims process when repairing automobiles.
  3. Ensure that insurers not advise consumers that inspection of their automobiles will take longer if the consumer does not take their automobiles to a specific shop.
  4. Ensure that disparaging and discrediting statements as to a record of poor service of a specific shop cannot be conveyed to consumers without specific documentation.
  5. Set a reasonable time limit for insurers to inspect damaged automobiles to conduct an inspection of their automobiles in the fair settlement of claims.
  6. Prohibit insurers from requiring consumers to drive an unreasonable distance to have their automobiles inspected for the fair settlement of claims.
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