Jina Petrarca-Karampetsos, Executive Director of ABARI, explains, "The first bill calls for the classification of shops (A and B), and the second is a private right of action for insureds and claimants for unfair claims practices and deceptive trade practices. Some years ago, there was a bill giving ahops a private right of action; this is not the same bill. The current bill is modeled from other states that give consumers a private right of action against insurers for various prohibited practices."
Bill 5491 was introduced on February 12 by Representatives Corvese, Winfield, Carnevale and Slater. If passed, Section 1 of this bill will allow the auto collision repair licensing advisory board to (1) establish appropriate rules, regulations and procedures; (2) establish standards for sanitary and healthful conditions in the work environment; (3) establish minimum requirements for the licensure of auto body shops; (4) establish minimum requirements for certification of auto body technicians; and (5) establish two classifications of full collision licenses.
The final component of this bill will have the most impact. If Bill H5491 is passed into law, Rhode Island body shops will be separated into Class A and Class B facilities. All collision repair shops in the state will be required to adhere to the first four tenets of the bill. However, those interested in being categorized as a Class A facility will need to submit an application by December 1, 2015. Applicants will be subject to an inspection to verify that they are compliant with all of the Class A requirements.
In addition to fulfilling the Class B standards, shops receiving a Class A designation will be required to meet additional criteria. These shops will need to prove that they have the ability to do the following for each vehicle being repaired: obtain proper specifications through an industry-recognized computer program with periodic updates; make 3D measurements which are verified by a computer program; inspect airbags and other restraint devices; perform welds on aluminum and high-strength steel to ORM specifications; refinish vehicles using a paint system with computerized mixing technology and a prep station; hoist vehicles on a lift for a full inspection; use emissions-reducing equipment for refinishing; adhere to regulations pertaining to the disposal of hazardous waste; and maintain a healthy work environment.
Class A facilities must also ensure customer satisfaction by providing a written limited lifetime warranty valid against workmanship defects, and they must maintain a system to document consumer complaints and responses to service. Other requirements include demonstrating certification and compliance with environmental agencies, providing evidence that all employed technicians are certified according to the board's standards, and possessing a facility of sufficient size to contain all necessary equipment and to safely perform repairs.
After the initial class designations are issued, Class B facilities may apply for Class A status at any time by submitting the necessary application materials.
Section 2 of H5491 would require each insurer selling policies in RI to conduct annual labor rate surveys for each classification of auto body shops. These surveys would exclude any shops with which the insurer had a previously-established DRP relationship.
Bill H5471 was also introduced to the General Assembly on February 12 by Representatives Corvese, Winfield, Carnevale and Slater. If enacted, this bill would allow any insured or third-party claimant to bring action against an insurer for monetary damages if the insurer employs any unlawful method, act or practice. This would include unfair claims and deceptive trade practices, as well as other unlawful actions.
Petrarca-Karampetsos states, “ABARI supports H5491 which would create two classifications of auto body repair facilities. If passed, this legislation will protect consumers and preserve competition. Technological advances in vehicle structures and safety systems require auto body repair facilities have the necessary equipment and trained technicians to ensure a safe repair and to preserve the proper performance and longevity of the repaired vehicle. This legislation would require shops to have certain equipment required by many manufacturers to be considered a Class A shop. All shops meeting the current minimum requirements in Commercial Licensing Regulation 4 would be deemed Class B. This bill is intended to incentivize Class B shops to invest in their businesses before they will no longer be able to complete as a result of automobile manufacturer requirements. Further, the motoring public should be aware of whether the auto body repair facility they have chosen has the equipment and expertise to repair their vehicle. ABARI protects consumers… if we don’t, who will?”
ABARI expects hearings to be scheduled on both proposed bills sometime in April.