Belron US Suggests Revisions to Model Anti-Steering
Legislation; Legislation Shelved for Future NCOIL Meeting
July 12, 2010
Officials from Belron US say a proposed draft of model steering
legislation fails to address insurance integrity, hurts consumers,
conflicts with many state statutes and insurance regulations, is
unconstitutional and that "claims of systematic 'steering'
are unfounded." These comments were made by Belron US senior
corporate counsel Brian M. DiMasi in a letter to the group developing
the model steering legislation, the National Conference of Insurance
Legislators (NCOIL), which met last week in Boston. (CLICK
HERE for related story.)
DiMasi says the main proponents of the legislation are "the
repair facilities that do not want to be part of a network,"
rather than consumers, and that allegations of steering are unfounded,
citing a January 2009 press release issued by the New York State
Insurance Department (CLICK
HERE for related story.)
"This is not a consumer-driven issue, but a matter of non-network
glass shops wanting to charge more than network shops; they want
to gain a competitive business advantage through legislation rather
than through effective business practices," writes DiMasi.
"An unintended consequence of this proposed Model Act would
clearly be higher prices for consumers."
In addition, DiMasi says the items noted in the proposed model
legislation already are covered by state laws requiring that insurers
honor policyholder preference.
"Insurance companies must and do honor the policyholder's
preference with respect to a glass repair facility," he writes.
"In fact, most states already have existing laws which prohibit
an insurer from requiring its policyholder to use a particular repair
Belron US also alleges that the model steering legislation would
keep insurers from "informing its policyholders as to the features
and benefits available under their polic[ies.]"
"When insurers are not permitted to explain high-quality,
low-cost alternatives under the policy, policyholders suffer,"
says DiMasi. "A glass repair should be a simple process for
consumers, and it's currently working for consumers. Why would anyone
want to add new layers of confusion and complication for a consumer
who is already dealing with an unexpected repair?"
On the same topic, he adds, "If a consumer indicates the name
of a repair facility, the insurer would no longer have the ability
to explain the features and benefits of the insurance policy. Consumers
would be justifiably outraged if they were blind-sided with an invoice
from a repair facility, charging them the difference between what
the insurance company paid and what the repair facility charged."
DiMasi goes on to say the proposed model act "is an unconstitutional
restriction of commercial free speech under the First Amendment
of the U.S. Constitution."
According to the letter, Belron also proposed its own specific
revisions to the legislation.
The letter was addressed to Sen. Ruth Teichman (R - Kan.), who
chairs the NCOIL property casualty committee developing the legislation.
NCOIL is made up of state legislators from across the country who
are involved in their own states' legislation insurance committees,
and one of its goals is to create model laws that can be introduced
as bills throughout the nation, in an effort to prevent further
federal regulation of insurance, according to the group's website.
The proposed model act, as presented at an NCOIL meeting this spring,
reads as follows, "In processing any such claim, the insurer
shall not, unless expressly requested by the insured, recommend
or suggest repairs be made to such vehicle in a particular place
or shop or by a particular concern."
In addition, a substitute version of the model law had been proposed
as well, and that revision would add several clauses, including
language prohibiting insurers from "engag[ing] in any act of
coercion or intimidation causing or intended to cause an insured
or claimant to utilize a preferred repair facility." The substitute
version of the model law also would address auto glass claims, though
glass was omitted from the original version of the bill.
Independent Glass Association (IGA) executive director Mike Russo
spoke during last week's meeting and provided those in attendance
with copies of the IGA's comic book, "Don't Get Steered."
Russo advised glassBYTEs.com/AGRR magazine that the
drafted legislation was shelved until the group's next meeting.
Neither NCOIL officials nor Sen. Teichman could be reached for comment.
What do you think about the proposed model legislation? CLICK
HERE to discuss.
HERE for full text of letter.
Need more info and analysis about the issues?
HERE to subscribe to AGRR magazine.