The model acts governing the use of aftermarket motor vehicle replacement parts, auto-body shop “steering” and the confidentiality of market conduct annual statements are being considered at the summer meeting of the National Conference of Insurance Legislators (NCOIL) currently underway in Boston.

The model law concerning auto parts may be of special interest to property/casualty insurers. An amendment legislators deferred from the spring meeting would restrict the conditions under which insurers could specify use of aftermarket crash parts and mandate permanent, transparent identification of crash parts. Eric Goldberg, associate general counsel and manager, state programs American Insurance Association (AIA) says the proposed rule threatens the continued use of aftermarket replacement parts.

“Quality aftermarket replacement parts are a safe and cost-effective alternative that helps to reduce insurance costs,” Goldberg said. “A majority of states already have regulations in place to ensure that consumers are adequately protected.”

Likewise, Goldberg says AIA is opposed to the model act regarding auto-body steering, which would require insurers to pay non-preferred body shops no less to complete a repair than they would pay a preferred shop and would prohibit insurer coercion, intimidation, or interference with a consumer’s choice. 

“Insureds genuinely appreciate the assistance of their carriers in selecting a repair facility following an accident,” Goldberg said.  “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. This particular model act is both over-reaching and unnecessary.”

Elsewhere, AIA I surging adoption of a model rule governing market conduct annual statement (MCAS) data. The proposed rule would require that MCAS data be kept confidential and would establish a system by which state insurance commissioners could confidentially collect, analyze, and share MCAS data. “The model act represents a balanced approach that includes necessary confidentiality protections,” Goldberg, said. 

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