The state of Rhode Island has enacted insurance legislation that reiterates existing state law that prohibits insurance companies from steering consumers to a preferred auto glass company.
The Surplus Lines Insurance bill was signed by the Governor on June 30. It clarifies and updates various insurance statutes including surplus lines licensing.
Rhode Island law prohibits insurance companies from requiring that glass repairs be made at a specific shop or interfering with their insured’s free choice of a licensed repair facility. Insurance companies may not contract with or direct claimants to an unlicensed motor vehicle glass repair shop. Rhode Island law defines deceptive acts, threats, coercion, or intimidation as an unfair or deceptive insurance practice.
The recently enacted bill, H 7752, includes language found in the “Unfair methods of competition and unfair or deceptive acts …” section of state insurance law, Section 27-29-4 (16), which states:
(16) Requiring that motor vehicle glass repair be made at a specified motor vehicle glass repair shop or interfering with the insured’s or claimant’s free choice of a licensed repair facility. The insured or claimant shall be promptly informed by the insurer of his or her free choice in the selection of a licensed motor vehicle glass repair shop. The insurer shall not require a person to use or employ unfair or deceptive acts or practices, threaten, coerce, or intimidate to induce a person to use or select a particular licensed motor vehicle glass repair shop to provide motor vehicle glass repair services. An insurer shall not knowingly contract with, refer motor vehicle glass repair services to, or otherwise negotiate with an unlicensed motor vehicle glass repair shop, as defined in chapter 38.5 of title 5. Once the insured or claimant has advised the insurer that a motor vehicle glass repair shop has been selected, the insurer may not recommend that a different motor vehicle glass repair shop be selected to repair the motor vehicle glass, and an insurer shall not assign or dispatch the repair work or forward a related policy or policyholder’s contact or repair scheduling information to a different licensed motor vehicle glass repair shop without the knowledge and consent of the insured. An insured may at any point in time elect to change the insured’s choice of licensed motor vehicle glass repair shop. However, an insurer authorized to conduct business in the state may provide directly, or through other means, including electronic transmissions, specific, truthful, and non-deceptive information regarding the features and benefits available to the insured under the policy to assist the insured in selecting a licensed motor vehicle glass repair shop or scheduling a licensed motor vehicle glass repair shop to perform motor vehicle glass repair, or enter into any preferred provider agreements and/or participate in direct repair programs or direct repair networks with licensed motor vehicle glass repair shops. A motor vehicle glass repair shop may file a complaint with the department of business regulation alleging a violation of this subsection (16). Whenever the department of business regulation has reason to believe that an insurer has violated this subsection (16), the department shall conduct an investigation and may convene a hearing. A complaint filed by a motor vehicle glass repair shop must be accompanied by a statement written and signed by the insured or claimant setting forth the factual basis of the complaint, and the insured or claimant must voluntarily appear and testify at any administrative proceedings on the complaint.
Full text of the bill H 7752 can be found here.