Posted on 24 Nov 2010
At its annual meeting held this year in Austin, Texas, the National Conference of Insurance Legislators (NCOIL) Property and Casualty Insurance Committee defeated an amendment to the Model Act Regarding Motor Vehicle Crash Parts and Repair that equated certified aftermarket crash parts with OEM parts.?? Robert L. Redding Jr., ASA’s Washington, D.C., representative, spoke on behalf of collision repairers at the NCOIL meeting in Austin, highlighting what ASA says were harmful provisions included in the Model Act. Redding asked the committee to address the following:
• Provisions regarding aftermarket parts certification should be eliminated.
• Provisions for consumer consent do not go far enough to protect vehicle owners or repairers.
• Provisions equating certified aftermarket crash parts to original equipment manufacturer (OEM) parts should not be included in the legislation.
Redding commented, “We are very grateful to our members for communicating with their state legislators opposing this legislation. We had a good response from collision repairers across the country who made it clear that this Model Parts Act is bad legislation and should be defeated.
Although attempts to include harmful parts certification language were defeated, the bill should not move forward as currently drafted. “Today’s decision on parts certification is also a tribute to the hard work of the late Paul Duncan, an ASA Collision Division Operations Committee member from Ohio, who had made stopping this legislation his top industry priority. Paul had planned to be in Austin and would have enjoyed the fruits of his labor,” said Redding.
The committee delayed other action on the Model Act Regarding Motor Vehicle Crash Parts and Repair, opting to continue discussion of the bill at a later meeting.??The model requires disclosure and consent prior to crash part repair or replacement; establishes conditions whereby insurers may specify the use of aftermarket crash parts; and mandates permanent identification of crash parts. The model legislation lays out situations in which insurers may specify the use of aftermarket crash parts in repairs.
Prior to the meeting, the Automotive Service Association (ASA) and the Society of Collision Repair Specialists (SCRS) had asked repairers to contact state legislators who serve on this committee and ask them to oppose the proposed Model Act. While progress was made for those in opposition to the Model Act, the committee decided to delay final action on the legislation until the NCOIL spring meeting in Washington, D.C.
The American Insurance Association (AIA), meanwhile, suggested amendments to the crash parts model that would allow "the use of aftermarket parts provided the insurer warrants the parts; clarification that policyholder notification of aftermarket parts usage may accompany the policy but does not need to be embedded within the policy language; and minimization of the amount of information to be manually entered by appraisers."
"The use of safe lower-cost aftermarket collision replacement parts affords consumers a savings of up to $1.5 billion per year," said AIA Associate General Counsel and Manager of State Program Eric M. Goldberg. "Maintaining this option on behalf of insurers and policyholders alike is especially important during this difficult economic period. Our recommendations to NCOIL aim to encourage competition and hold the line on repair costs to the benefit of consumers' wallets."
The Certified Automotive Parts Association (CAPA) also attended the hearing, with Executive Director Jack Gillis emphasizing the need to regulate aftermarket crash part quality. At the hearing, Gillis addressed two key concerns expressed by committee members in the past: Is this important to consumers, and what are the safety ramifications? Gillis presented a recent ConsumerReports.org article that stated,
“In general, consumers should insist on replacement parts built to original-equipment specifications, and standards such as CAPA Certification can make it easier to identify quality components.”
In addition, Gillis showed the committee video of the recent IIHS demonstration crash testing in which both low- and high- speed tests on vehicle bumpers were conducted. The committee saw that the low-speed damageability tests resulted in identical repair costs between the part meeting CAPA standards and the OEM part. In addition, they saw the high-speed tests in which IIHS declared the performance between the two parts to be essentially the same.
Prior to the decision to postpone voting on the bill, Center for Auto Safety Executive Director Clarence Ditlow presented the consumer benefits associated with replacement parts certified by CAPA. In addition, Bob Anderson, owner of Anderson’s Automotive Services of Sheffield, Ohio, and CAPA Board chairman, emphasized the importance of having aftermarket parts in the market.
At the hearing, George Cook, representing the automobile manufacturers, expressed appreciation for the efforts CAPA was making in terms of verifying safety.
“Nobody benefits from poor quality replacement parts, and the next few months will provide us with the opportunity to address concerns and develop a bill that will truly benefit both consumers and the marketplace,” Gillis said.