South Carolina Anti-Steering Bill Passes State House; TPA Ownership, Solicitation of Customers Again Addressed in Growing Legislation Trend
May 19, 2011
A South Carolina bill designed to prevent steering by third-party glass claims administrators (TPAs) has advanced through the state’s house with a nearly unanimous vote of 104-1.
Specifically, the bill would prohibit TPAs that also have retail divisions, or that have 10 percent ownership or more in an auto glass business, to refer policyholders’ glass claims to itself or to use information obtained through its work as a TPA to solicit business.
The language of the bill reads as follows: “It is an unlawful trade practice for a motor vehicle glass repair business actively engaged in the repair of motor vehicle glass, or a person or entity with a ten percent or more ownership interest in that business, and acting as a third-party administrator of insurance claims made pursuant to insurance coverage for motor vehicle glass repair to: (1) refer or steer, or cause to be referred or steered, an insured’s motor vehicle glass repair business to itself; or (2) use consumer information obtained in the process of acting in that dual capacity to solicit motor vehicle glass repair business.”
If passed, the act would take effect upon approval by the state’s governor, Nikki Haley.
The bill has been sent to the state’s Senate for review. The South Carolina legislative session runs through June 2.
The bill originally was introduced by Reps. James Harrison, Joan Brady, Lewis Pinson, Elizabeth Munnerlyn, Thad Viers, Jenny Horne and Nelson Hardwick.
A similarly worded bill under review in Texas passed its House Licensing and Administrative Procedures Committee just last week. The current version of the Texas bill would prohibit TPAs that hold at least a 10-percent ownership interest in an "automotive glass repair service" from referring a third-party claimant or insured to the company; coercing a third-party claimant or insured to utilize the company's services, and using consumer information obtained in the process of acting as a third-party administrator to solicit business for the auto glass company.
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