Soat Speaks at Arizona Insurance Committee Meeting in Opposition to Bill Targeting Auto Glass Shops
February 2, 2010

Fas-Break chief executive officer Kerry Soat addressed an Arizona bill targeting auto glass shops during a meeting of the state’s House of Representatives Banking and Insurance Committee held yesterday. The bill, H.B. 2463, identifies several types of insurance fraud and addresses auto glass businesses specifically. (CLICK HERE for related story.)

Soat, who also serves as vice president of the Arizona Glass Association (AGA), pointed out to the committee that much of what is detailed in the bill is already on the law books in the state—and pushed for enforcement of those laws rather than the passing of a new one.

“When you take this bill at face value, as I have just demonstrated, the answer is not by writing more laws, but by enforcement of the ones we already have,” he said. “It’s possible the real issue here is effective enforcement and for the public to be made more aware of their current rights against fraudulent practices by any industry, not just the auto glass industry.”

Soat also spoke out against the idea that insurers might be the ones policing the new legislation, if passed.

“Allowing an insurance company to engage in any type of ‘enforcing’ the laws of Arizona, you are opening up a precedent they will take to further reaches than just the auto glass industry,” he said. “Any company that operates in ‘any’ fashion that doesn’t fit with their view of handling claims will be ‘locked up and jailed’ according to this bill.”

The bill would make violations of any of its provisions a felony, a stipulation against which Soat also spoke.

“A felony is a very serious charge, not to mention being found guilty of one,” said Soat. “It means you no longer have the right to vote, you no longer have the right to hunt in the state of Arizona, you no longer have the right to carry or own a gun, and it is becoming increasingly impossible to find a place to live or to get a job.”

Soat says that though the legislators listened to what he had to say, he’s not sure how much will change as the bill moves forward.

“We scored some points with the legislators, but the bills still moved forward with the insurance company reps [being] told to get with us to make amendments correcting these issues we brought up,” he says. “The committee was upset about the failure by the insurance companies to consult with our organization when preparing this bill.”

If passed, the provisions set forth in Arizona’s House Bill 2463 would define several unlawful practices when dealing with auto glass claims—for example, submitting claims in instances where the work wasn’t provided; submitting claims with references to geographic areas in which the work was not completed; submitting claims in which the owner of the vehicle didn’t authorize the work; and showing work performed on a date other than when it was actually performed.

The bill also would prohibit auto glass businesses from signing a work order or claim form “falsely” on behalf of a policyholder.

H.B. 2463 also includes several provisions about “misrepresentations.” It prohibits auto glass businesses and associates from misrepresenting their relationship to a policyholder’s insurer; the cost of the proposed repairs; and whether the insurer has improved the repairs or replacement.

The proposal also would make it illegal for auto glass businesses to “represent to a policyholder or other person that the repair or replacement will be paid for entirely by the policyholder’s insurer and at no cost to the policyholder unless the person making the statement is employed by or is a producer contracted with the policyholder’s insurer.”

The bill specifies that it is illegal to “add to the damage of auto glass before repair in order to increase the scope of repair or replacement or encourage a policyholder or other person to add to the damage of auto glass before repair.”

Finally, H.B. 2463 also outlaws performing working “substantially beyond the level of work necessary to repair or replace the auto glass.”

The Arizona Glass Association (AGA) also has issued a formal response speaking out against the bill.

“This proposed legislation attempts to criminalize market practices in insurance claims by singling out the auto glass industry for practices that are, in almost all instances, already prohibited,” writes the AGA. “In addition, it attempts to create a felony offense and shift the presumption of innocence, a constitutional right, against local auto glass shops. The proposed legislation is vague, duplicative of other areas of the statutes, and addresses that auto glass market in the insurance statutes unfair claims sections, whose purpose is to regulate trade practices in the business of insurance, not the auto glass industry.” (CLICK HERE for full text of AGA’s statement.)

In addition to Soat, Iowa Glass Industries' Cindy Ketcherside and AGA president Rex Altree of New Image Auto Glass also spoke about a different bill, H.B. 2464, which would change the wording in the state's laws with reference to auto glass deductibles. (CLICK HERE for full text of that bill.)

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