National News
Repairers Testify Against AMPs and Airbag Fraud Model Laws
PHILADELPHIA, PA—Air bag fraud, insurer steering and aftermarket parts were some of the topics open for debate at the summer meeting of the National Conference of Insurance Legislators (NCOIL) held in Philadelphia over the July 11th weekend.
Two pieces of model legislation drew fire from repairers during a special meeting of the Property-Casualty Insurance Committee.
The Proposed Model Act Regarding Auto Airbag Fraud would set felony penalties for airbag crimes and would require shops to show airbag bills of sale or invoices to prove that they had purchased suitable replacement airbags.
The draft bill supported the purchase and installation of salvage airbags - a repair option that drew opposition from the Automotive Service Association (ASA) and the Society of Collision Repair Specialists (SCRS).
Aaron Schulenburg, executive director of the SCRS, appeared before the committee and submitted testimony opposing the endorsement of salvage airbags in the legislation. "The use of salvaged airbags is still rigorously debated within the industry due to safety and liability concerns and to date there is no conclusive proof that salvaged airbags are consistently as safe as new OEM replacements."
Harry Moppert, owner of Moppert Brothers Collision Services Group in Morton, Pennsylvania, submitted similar comments on behalf of ASA. Moppert said, "Although the proposed model legislation before your Committee includes elements that make some significant improvements to current law, it fails to address a critical issue; salvage airbags should not be used in vehicle repair. The airbag cover and installation stipulations, recordkeeping, police accident reports, and penalties are certainly helpful to the process but at the end of the day, salvage airbags put vehicle occupants at more risk than necessary."
Also up for consideration was a model bill that NCOIL says is meant to challenge insurer crash part mandates and target steering. The proposed Model Act Regarding Motor Vehicle Crash Parts and Repair contains sections on insurer specification of crash parts and a generic prohibition of insurer steering. The measure would create the legal presumption that parts certified by the Certified Automotive Parts Association (CAPA) are of like kind and quality to OEM parts.
Moppert testified that, "Aftermarket crash parts, certified or not, do not assure consumers or repairers that they are equal to OEM. The quality and safety requirements, particularly for offshore parts, may or may not be evident for certified aftermarket parts. Parts certification in the U.S. has been very limited in scope. With 3% or less of the aftermarket parts being certified, there is little assurance from any data on quality and safety that can be gleaned for policy discussions."
On the subject of steering, the model law contains language based on current New York State law that forbids insurers from recommending or suggesting that repairs be made in a particular place or shop, unless expressly requested by the insured. However a pattern of violations would need to be established before a penalty could be assessed.
In its opposition to this bill, SCRS testified that the "pattern of practice" requirement does not provide an acceptable deterrent. "If the law identifies the practice as illegal, it should be illegal on every account…"
Other sections of the bill would allow for insurers to charge a higher deductible to consumers who wish to have OEM parts used to repair their vehicle, or for states to require insurers to allow a consumer to pay the difference between OEM and aftermarket if the consumer insists on using OEM parts.
The committee did not vote to approve either bill following the testimony. It was agreed that both bills would be taken up again during the November meeting of NCOIL in New Orleans.
Summary of model Auto Airbag Fraud act
The Act establishes criminal penalties for fraudulent installation or reinstallation of an airbag, with more severe penalties for persons whose airbag fraud results in serious injury or death; requires that auto repair facilities maintain detailed records of airbags they purchase, sell, or install; mandates that a repair facility submit an affidavit to a vehicle owner saying that an airbag was installed and calibrated properly; establishes that police accident reports must note whether an airbag deployed; and provides that a person trading or selling a motor vehicle must disclose whether an airbag is inoperable.
Summary of model Motor Vehicle Crash Parts and Repair act
This Act applies to personal lines of motor vehicle insurance policies and protects consumers filing auto body damage claims with their insurers. The model requires disclosure and consent prior to crash part repair or replacement; establishes conditions whereby insurers may require use of aftermarket crash parts, including provisions regarding new vehicles and those under original car-company warranty; mandates permanent, transparent identification of crash parts; provides for consumer choice in selection of an auto repair facility, and promotes accountability, among other things.
________________Article from July 13, 2009, issue of CollisionWeek.
© 2010 Oregonians for Safe Auto Repair
