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Wednesday, 30 November 2005 17:00

National legis. group adopts resolution on AM parts

Concluding well over ten years' debate regarding aftermarket crash parts, the National Conference of Insurance Legislators (NCOIL) unanimously adopted a "Resolution Regarding Motor Vehicle Crash Parts" at its annual meeting in San Diego, California last month. 

NCOIL proposed resolution
 
(Sponsored by members of the NCOIL Aftermarket Crash Parts Subcommittee (Sen. Pam Redfield, NE, chair; Sen. Joe Crisco, CT; Rep. Ron Crimm, KY; Sen. Alan Sanborn, MI; Assem. Ivan Lafayette, NY; Rep. Geoff Smith, OH; Sen. Stewart Greenleaf, PA: Rep. Mark Young, VT; and Rep. George Keiser, ND, P-C Committee chair)
 

WHEREAS, NCOIL recognizes that car company, certified, aftermarket, and other motor vehicle crash parts are essential to the crash repair industry; and

WHEREAS, use of these parts fosters a competitive environment that leads to lower repair costs and fewer totaled vehicles--to the benefit of consumers, collision repair facilities, and insurers; and

WHEREAS, the quality of repair parts in terms of fit and finish is essential to the benefit of consumers, collision repair facilities, and insurers; and

WHEREAS, thirty-one states have enacted legislation that, in general, requires consumer notification as to the kind of crash parts to be used by an auto body professional; and

WHEREAS, NCOIL has debated issues related to motor vehicle crash parts for more than ten years, and has heard substantial commentary from interested parties and considered, in-depth, two model laws;

NOW, THEREFORE, BE IT RESOLVED that NCOIL, in the pursuit of open competition, endorses the use of all kinds of crash parts when appropriate for motor vehicle repair; and

BE IT RESOLVED that NCOIL supports consumer awareness of the differences between types of crash parts, as well as notification regarding the kind of crash part for which an insurer will reimburse; and

BE IT RESOLVED that NCOIL believes that if an insurer requires, as a condition of reimbursement, the use of a certain type of crash part, then that insurer should stand behind the part(s) it requires; and

FINALLY, BE IT RESOLVED that NCOIL will distribute this resolution to state legislative and other leaders.

The resolution ends debate over a national aftermarkets part bill, which had been called the "Certified Aftermarket Crash Parts Model Act."

The resolution recognizes the importance of competition in the crash repair industry and supports (1) use of all kinds of crash parts when appropriate; (2) consumer awareness of the differences between types of crash parts, as well as notification regarding the kind of part for which an insurer will reimburse; and (3) having an insurer stand behind the part(s) it requires.

An NCOIL Aftermarket Crash Parts subcommittee, formed following the July NCOIL Summer Meeting, officially recommended that the Property-Casualty Insurance Committee consider the resolution in place of the aftermarket model law.

The subcommittee initially agreed to a series of amendments to the model but ultimately determined that they were unworkable and that a resolution would be more appropriate. At the annual meeting, the subcommittee presented, for the full P-C Committee's review, the rejected amendments so that the committee could appreciate the scope of the subcommittee's work.

The proposed model act would have, among other things, endorsed certification of aftermarket crash parts by third-party organizations, such as the Certified Automotive Parts Association (CAPA); required disclosure as to the use of certified aftermarket crash parts; deemed that certified parts are of "like kind and quality" to car-company parts; provided that a person leasing or financing a vehicle could not be penalized for using a certified part; and identified the Act's purpose as creating a market incentive for the use of certified aftermarket crash parts.

In November 2002, legislators deferred further review of the draft until the 2005 Spring meeting, citing a need to address other issues. The model, first examined in November 2001, represented one aspect of NCOIL's ongoing aftermarket deliberations. The P-C Committee unanimously adopted the "Resolution Regarding Motor Vehicle Crash Parts" on November 17 and referred it to the Executive Committee, which unanimously adopted it on November 19, 2005.

Support from CAPA

CAPA Executive Director Jack Gillis commended NCOIL for unanimously passing the resolution. "The American consumer can look forward to positive state action to open the markets to increased competition and fairer prices when it comes to collision repairs," stated Gillis.

Gillis lauded the committee for their recognition that consumers need more choice and high quality parts. "Thanks to the hard work of Representative George Keiser, N.D., chairman of the Property Casualty Insurance Committee and Senator Pam Redfield, Nebraska, chairperson of the Special Subcommittee, the states now have a blueprint for moving forward and protecting consumers from both poor quality parts and monopolistic pricing," said Gillis.

"Not only do consumers win when their cars are repaired using quality parts at competitive prices, but the collision repair industry gets more cars to repair because fairly priced parts don't 'total' out cars," concluded Gillis.

 

 

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