Michigan TPA Code of Conduct Bill Sees Changes, Movement in State Senate
January 25, 2012

by Penny Stacey, pstacey@glass.com

The Michigan State Senate reviewed a bill that would place several requirements on third-party administrators, including the addition of a code of conduct by which those that also provide auto glass services would have to abide in order to maintain both services, yesterday, and reported favorably on the legislation. The bill, S.B. 306, introduced by Sen. Joseph Hune, now is due for a third reading, but with several changes from the original text of the bill.

Among these, the original bill would have mandated that insurers not “permit a third-party biller (TPA) to also provide automobile glass repair or replacement services for [it] unless the [TPA] adopts and follows ... a code of conduct.” The latest draft of the bill, however, places the onus on TPAs, and states: “A [TPA] shall not provide automobile glass repair or replacement services for an insurer unless the [TPA] adopts and follows, when processing, paying, administering or monitoring an automobile glass repair or replacement service for the automobile insurer, a code of conduct.”

Several changes also have been made to the code of conduct that would be required. The original bill would have mandated that the TPA suggest three network facilities to the consumer if the consumer didn’t have a preference or had a preference that wasn’t on the TPA’s network. The latest language in the bill has removed this provision, and now, in cases where the insured has no preference or prefers a non-network facility, the legislation would require the TPA “to advise the insured that the insured has the right to choose any repair or replacement facility and the TPA shall not threaten, coerce or intimidate the insured into selecting a particular repair or replacement facility.”

The original version of the bill also would have required TPAs to submit monthly reports to the state’s insurance commissioner with the scripts used, statements of all insurer contracts, statements of ownership, the total number of jobs completed in the previous month and the shops that completed them, and the number of jobs processed for each insurer.

The latest version of the bill, however, lists this as an annual requirement, and does not include several required documents listed in the original bill, including scripts and lists of contracts with insurers. It includes an additional provision, though, that TPAs provide a list of “the names of the auto glass repair and replacement facilities for whom a preference was stated.”

At press time, representatives of Sen. Hune’s office had not yet responded to requests for comment.

What are your thoughts on the changes to the bill? Please email pstacey@glass.com.

This story is an original story by AGRR™ magazine/glassBYTEs.com™. Subscribe to AGRR™ Magazine.
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