The Connecticut public act designed help prevent steering by third-party insurance claims administrators to affiliated auto glass companies should remain intact to “protect consumer choice,” attorneys representing the state Attorney General and insurance commissioner claim in court documents filed with the U.S. District Court of Connecticut Monday in opposition to Safelite’s motion for a preliminary injunction to half enforcement of Public Act 13-67.
To support this claim, the defendants’ attorneys laid out specific examples of what happened with local independent auto glass shops when an insurance company switched from third-party claims administrator Lynx Services, which has no affiliated auto glass division, to Safelite Solutions, which is affiliated with Safelite AutoGlass.
“For example, on or about January 1, 2012, Allstate Insurance Co. switched to Safelite Solutions after several years of using Lynx Services as its glass claims administrator. Unlike Safelite Solutions, Lynx Services has no ownership affiliation with any glass repair shop in Connecticut,” attorneys for the defendants claim. “As a result, when Lynx Services administered auto glass repair claims for Allstate it routinely provided consumers with the names of multiple non-affiliated glass repair shops in its approved network that were both capable of performing the repair and located within a reasonable distance of the consumer. By contrast, Safelite Solutions is not required by Allstate to provide the name of a non-affiliated repair shop to Connecticut consumers insured by Allstate.
“The effect that Allstate’s switch has had on consumer choice is reflected in the steep increase in the utilization rate of Safelite AutoGlass for consumers insured by Allstate,” they went on to claim. “For example, in 2011, under the Lynx system of affirmatively providing consumers with the names of non-Safelite affiliated shops, Action Glass LLC was chosen by consumers insured by Allstate 137 times. In 2012, after Safelite Solutions took over the Allstate account and stopped affirmatively providing the names of any non-Safelite affiliated shops, Action Glass was chosen by such consumers only 63 times in 2012—a decrease of more than 50 percent in one year. Action Glass is a longstanding member of Safelite Solutions’ approved network of glass repair shops.”
The attorneys included affidavits from owners of glass companies in support of their claim.
“For Auto Glass of Connecticut, also a longstanding participant in Safelite Solutions’ approved network, the decrease is even more striking, with consumers choosing the shop 86 times in 2011 (under the Lynx system), but only 10 times in 2012 (when Safelite Solutions was the claims administrator),”attorneys claim.
The attorneys go on to argue that this trend holds true across the board.
“Eight representative non-Safelite affiliated repair shops in Connecticut were chosen by consumers insured by Allstate 1,415 times in 2011 (under the Lynx system), yet those same repair shops were chosen by such consumers only 673 times in 2012 (when Safelite took over). All eight shops participate in Safelite Solutions approved network,” attorneys claim.
Attorneys for the Connecticut Attorney General George Jepsen and Thomas Leonardi, insurance commissioner, also highlighted other trends; however, this information was redacted in the public version of the court records. In a separate motion, the defendants’ attorneys moved to file these documents under seal with the court.
“The un-redacted version of the defendants’ memorandum contains limited discussion and brief reference to certain confidential commercial information of the plaintiffs and the insurance company clients of plaintiff Safelite Solutions LLC,” attorneys claim in this motion to seal documents. “The confidential commercial information the defendants seek to seal was provided by the plaintiffs in response to the defendants’ discovery requests.”
The information redacted in the filing includes how many “non-affiliated” repair shops in Connecticut are a part of Safelite’s approved network, but that the “affiliated” shops appear to get more business—laid out as a percentage.
“Connecticut law requires administrators of automotive glass insurance claims who own or share an ownership affiliation with an auto glass repair shop to provide Connecticut consumers with the name of at least one non-affiliated auto glass repair shop,” attorneys for the defendants claim “This requirement is constitutional because Connecticut has a substantial interest in protecting consumer choice in automobile insurance repair work and because the means chosen to carry out that interest—the requirement to provide the name of at least one non-affiliated shop—is narrowly tailored and will directly and materially advance the goal of protecting consumer choice.
“Many consumers do not have the name of an auto glass repair shop close at hand,” attorneys went on to claim. “Therefore, when an insurance claims administrator affiliated with an auto glass repair shop, like Safelite, does not provide the consumer with the name of a non-affiliated repair shop, the affiliated repair shop received a high disproportionate amount of repair work.”
The attorneys also claim, “… Insurance claims administrators remain free to determine which shop name to provide to any given consumers, including those of repair shops that participate in approved repair networks. Thus, Connecticut’s presumptively constitutional law is a minimal and narrowly tailored way to practically and effectively provide choice to consumers who usually do not know the names of any glass repair shops when they call their insurance claims administrator.”
Safelite had asked the U.S. District Court of Connecticut in August to “enjoin and declare invalid the portions of a recently enacted Connecticut statute.”