Collision
Week News
Fri, 1 May 2009
Montana Association
Shares Hard Legislative Lesson
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Russell Thrall]
Association-backed estimating
bill defeated by opposition
from insurance lobby and two
information providers…
but did it have to be?
The
Montana Collision Repair Specialists
(MCRS) are sharing a hard-learned
legislative lesson with other
repair associations after an
MCRS supported bill was killed
in the state Senate this year
in the face of opposition from
insurers and two estimating
system providers.
"MCRS'
hope is that our costly experience
will help other association's
recognize who the players are
when they put forth their legislative
efforts so they are aware of
potential opposition before
they proceed," the group
wrote in a statement describing
the details of their recent
legislative defeat.
Montana
introduced two MCRS-backed bills
in the 2009 Legislative session.
The first measure, House Bill
291, changed the words 'lowest
prevailing rate' to 'average
market rate' in the state's
insurance code and passed through
both houses of the legislature
by a wide margin and was signed
into law. (see related story
below)
Excerpt:
Minnesota 2008 SF3508
Under
Prohibitions on Insurer:
(7) unilaterally and arbitrarily
disregard a repair operation
or cost identified by an estimating
system, which an insurer and
collision repair facility have
agreed to utilize in determining
the cost of repair.
Excerpt: Rhode Island 2007 H5549
Under
"unfair claims practices"
defined:
(19) Modifying any published
manual (i.e. Motors, Mitchell,
or any automated appraisal system)
relating to auto body repair
without prior agreement between
the parties.
The second, House Bill 286,
was designed as a measure to
stem database abuse by requiring
the use of estimating systems
in their entirety. This bill
was modeled after similar bills
recently passed in other states,
Rhode Island in 2007 and, more
specifically, Minnesota in 2008.
The MCRS bill however, was missing
two words that the successful
Minnesota bill contained. And
it may have been those two words,
and some miscommunication that
likely caused the bill's failure.
In
2008, Minnesota passed a new
law stating that insurers may
not "unilaterally and arbitrarily
disregard a repair operation
or cost identified by an estimating
system, which an insurer and
collision repair facility have
agreed to utilize in determining
the cost of repair."
According
to MCRS, "The only difference
from the Minnesota bill was
the exclusion of the words 'unilateral
and arbitrarily'. These words
were removed on the advice of
the Bill writer at the State
Capitol. This bill passed out
of the House in a 95-5 vote
which led Montana collision
repairers and the MCRS lobbyist
to be cautiously optimistic
going into the Senate."
Following
a hearing in the Senate, the
vote was postponed due to intense
opposition by the insurance
lobby, according to the MCRS.
In addition, MCRS claims that
Audatex and CCC had been requested
to send letters of opposition
to the Senate committee. "It
was made clear in writing and
verbal communication from Montana
Senators that the letters from
Audatex and CCC affected their
vote," the MCRS said. (Copies
of both letters appear below)
Before
the final vote, the bill was
amended to once again include
the words 'unilaterally and
arbitrarily,' making it identical
to the successful Minnesota
legislation. However, the bill
was still killed in committee.
Both
CCC and Audatex pointed out
that the original version of
the bill did not allow anyone,
insurer or repairers, to deviate
from the estimating system,
even if they both agreed it
was the right thing to do.
According
to Rick Tuuri, Associate VP,
Industry Relations for Audatex,
"The Audatex position statement,
which refers to the bill prior
to any amendments, was issued
to ensure that users of the
Audatex system are allowed by
law to exercise their professional
judgment when using the Audatex
estimating system. Over the
years, repairers have consistently
complained that the Audatex
system is not used as a guide
or a flexible tool, as intended,
but rather it is used by some
as 'the Bible.' Ironically,
the MCRS managed to draft and
forward a bill that would have
legislated that very position."
"When
crafting legislation, every
word is significant and important.
It is incumbent upon the authors
of proposed legislation to communicate
with all parties that may be
affected by any such proposition
to try to reach mutual understanding
and accord, prior to going to
committee or to legislative
session," Tuuri said.
CCC
Information Services, also echoed
that sentiment. "CCC does
not believe Montana HB286 properly
accounted for the role of the
estimating systems in the collision
estimating process," said
Jim Dickens, General Manager
of the Automotive Services Group
at CCC. "We felt it important
to inform the committee of our
views, and our letter was submitted
for that purpose only, not to
serve or promote the interests
of insurers over repairs. CCC
would look forward to working
associations in Montana and
elsewhere ahead of time whenever
possible to avoid this unfortunate
circumstance in the future.
Tuuri
likewise offered future cooperation,
"Audatex welcomes the opportunity
to work together with the MCRS
and anyone in the industry on
the legislative front.
"While
their intentions may have been
good, their effort at wording
HB 286 certainly was not. I
personally had no idea who had
drafted the bill. Had I known,
I would have gladly reached
out to them and offered to work
together, as I did after all
of this transpired," Tuuri
concluded.
