NCOIL TO CONSIDER THREE PROPOSED MODEL ACTS CONCERNING PROPERTY-CASUALTY INSURANCE AT ITS SUMMER MEETING
WASHINGTON, DC, July 7, 2010 – The National Conference of Insurance Legislators (NCOIL) will review three proposed model acts of particular interest to property-casualty insurers during its 2010 Summer Meeting according to the American Insurance Association (AIA). The model acts under NCOIL review pertain to issues concerning the use of aftermarket motor vehicle replacement parts, so-called “auto-body steering,” and the confidentiality of market conduct annual statement (MCAS) data.
NCOIL’s Property & Casualty Committee will consider a proposed Model Act Regarding Motor Vehicle Crash Parts and Repair. The model law, which legislators deferred from the Spring Meeting, would require disclosure and consent prior to crash part repair/replacement; establish conditions in which insurers could specify use of aftermarket crash parts; and mandate permanent, transparent identification of crash parts.
“The continued use of aftermarket motor vehicle replacement parts is important to both consumers and insurers alike,” said Eric M. Goldberg, AIA associate general counsel and manager, state programs. “Quality aftermarket replacement parts are a safe and cost-effective alternative that helps to reduce insurance costs. A majority of states already have regulations in place to ensure that consumers are adequately protected.”
The committee will consider a substitute amendment to a proposed Model Act Regarding Insurer Auto-Body Steering, as well as suggested amendments by interested parties. The draft substitute would ban an insurer from so-called “auto-body steering” (requiring use of a specific repair facility), would allow an insurer to recommend a location if a consumer hadn’t selected one, and would prohibit insurer coercion, intimidation, or interference with a consumer’s choice. The substitute also would require insurers to pay non-preferred body shops no less to complete a repair than they would pay a preferred shop.
“Insureds genuinely appreciate the assistance of their carriers in selecting a repair facility following an accident,” according to Goldberg. “It is often the case that the insurer provides a guarantee for the work completed by its preferred repair facilities and this is an additional benefit to the consumer,” added Goldberg. “This particular model act is both over-reaching and unnecessary.”
The committee will consider a proposed Market Conduct Annual Statement Model Act. The proposed model would, among other things, require that market conduct annual statement (MCAS) data and analysis be kept confidential and privileged and would establish a system by which state insurance commissioners could confidentially collect, analyze, and share MCAS data with other entities, including the National Association of Insurance Commissioners. The model bill was introduced at the 2009 NCOIL Spring Meeting and considered during the 2009 Summer and Annual Meetings, as well as the 2010 Spring Meeting.
“While we remain concerned that the revenue threshold for participation is too low, this model act should be adopted once and for all,” said Goldberg. “The model act represents a balanced approach that includes necessary confidentiality protections.”
While the Property & Casualty Committee will be reviewing the aforementioned model acts, it will not be considering them for formal adoption until NCOIL’s 2010 Annual Meeting in November. NCOIL is holding its 2010 Summer Meeting from July 7 to July 11 in Boston, Massachusetts.