On April 12, shortly after the CRA media demonstrations, Allen Wood, CRA Executive Director,.wrote to the Commissioner’s office asking, in essence for leadership on substandard aftermarket parts.
The letter read, in conclusion: The law requires insurers to warrant that aftermarket parts are the same as OEM. Please require insurers that limit benefits to aftermarket reinforcement bars to prove to you that these parts are as good as OEM—it’s the law!
It also addressed the jurisdiction issues between CDI and body shops: "The warranting of equal, kind, quality, safety, fit, and performance is regulated as part of the business of insurance and not auto repair. Any shifting of liability is not supported by current regulation as this issue is rooted in the business of insurance and not repair"
Conlin Writes Back
On April 16, Peter Conlin, Counsel to the Commissioner, wrote back to Allen Wood, quoting the above passage.
Specifically, Conlin questioned the CRA’s assumption that civil liability would not lie with the repair shop in the case of substandard repair parts.
The letter reads in part (emphasis added): “The jurisdiction of the California Department of Insurance reaches insurers but not auto repair shops, CDI regulations could not impose liability on a repair shop. You had offered the statement quoted above as a response to a statement you attributed to a representative of the aftermarket industry that "it is the repair professional's responsibility to determine if the aftermarket part meets the quality standard."
Is it the CRA position that a repair shop would face no civil liability knowingly installing a substandard replacement part?
As a related issue, is it the CRA position that the Uniform Commercial Code, and its implied warranty of merchantability, does not apply to a repair shop?
In the final paragraph of the letter, found on page three, you write that "forming a working group, or calling for a study, should not be the first response."
As I have researched aftermarket parts issues, the apparent absence of any uniform and broad-based processes for parts-testing and parts-tracing has struck me as a significant defect in public policy.
In offering the statement quoted immediately above, was it your intention simply to convey your sense of priorities or would you consider a study or working group focused on testing and tracing not to be a worthwhile endeavor? I do appreciate your offer that the CRA "stands ready to assist (CDI) staff" as to how "to assess the quality of aftermarket reinforcement bars."
To that end, I will repeat the request I made during our March 4th meeting that the CRA forward to the department specific identifying information on any aftermarket bumper reinforcements it believes are substandard, including the name of the manufacturer and model and lot numbers, as well as information on parts distributors that supply these products to repair shops. I would appreciate any further guidance you could provide. Please contact me if you have any questions. I will be contacting you within the next several weeks with an update on department activities.