AB 1200 Progresses, Continues to Face Opposition
June 24, 2009
A California bill that would ease the state's anti-steering law
has been moved from the Senate rules committee to the committee
on banking, finance and insurance, and is scheduled to be heard
for the first time on Wednesday, July 1just one week from
today. The bill, which has already passed the state's Assembly,
is designed to "provide that nothing in existing law restricts
the ability of an insurer to explain benefits the insurer provides
as part of the claims process." It has met much opposition
from collision groups, and even from U.S. Congresswoman Jackie Speier
(D-Calif.), who sponsored the state's existing anti-steering law
as a member of the California assembly.
This week, the Collision Repair Association of California (CRA)
released a statement calling the opposition to the bill a "defining
moment in the collision repair industry."
"This short-sighted legislation, written by the Personal Insurance
Federation of California, seeks to end the right of consumers to
choose where their damaged vehicle is repaired," says CRA president
Lee Amaradio. "In articulating our position, we have an opportunity
to educate lawmakers on the harm caused by insurers that steer customers
to their DRP shops. Conversely, if we fail, insurers will have a
death lock on the process by which repair facilities are selected
by vehicle owners."
If passed, the section of the state's insurance code regarding
consumer choice of repair facilities, would now read, "Nothing
in this section restricts the ability of an insurer to explain benefits
the insurer provides as part of the claims process."
Current state law says that once a claimant has selected a shop,
the insurer cannot make any recommendations or suggestions regarding
shops. According to the CRA, the California New Car Dealers Association
has proposed amendments to the bill that would limit an insurer's
discussion to provisions of the auto policy once the consumer has
selected a shop.
"The term 'benefits' opens the steering door a mile wide,"
adds CRA lobbyist Richard Steffen. "I don't care how you re-write
this bill, if 'benefits' remains in the language, steering will
be sanctioned by state law."
The bill has received much support from several insurance groups,
including the Personal Insurance Federation of California, the Association
of California Insurance Companies, Farmers Insurance, National Association
of Mutual Insurance Companies (NAMIC), the Pacific Association of
Domestic Insurance Companies (PADIC) and State Farm, who argue that
existing laws are being used "to withhold information from
customers about their auto repair options," according to the
Assembly insurance committee's analysis of the bill. (CLICK
HERE for related story.)
HERE for full statement from CRA.
HERE for current text of the bill.
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