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Letter to the Editor

California Senate Bill 1648 Passes Assembly Insurance Committee

The California Assembly Insurance Committee held a hearing on California Senate Bill 1648. The legislation prohibits insurance companies from having an ownership interest in auto body repair facilities. The committee passed the measure by a vote of 12-4.

Automotive Service Association (ASA) Chairman-elect Kevin Caldwell, owner of Autobody by Caldwell in Laguna Hills, Calif., testified before the committee.

"I am very pleased the Assembly Insurance Committee passed Senate Bill 1648. Insurer ownership will eliminate the rights of consumers and destroy our competitive marketplace. Insurer shop ownership strikes at the core of the small business community," Caldwell said.

The California Senate passed S. 1648 on May 29 by a vote of 29-7. The Assembly Insurance Committee issued an analysis of the bill before the vote that included a suggested amendment. The committee suggested amending the bill to allow insurance companies to invest in auto body repair facilities, but prohibit the companies from directing, suggesting or recommending to the insureds their vehicles be repaired at a shop in which the insurer has an interest.

"The committee's action affirms the importance of repairers speaking up and making a difference. Time and again when repair shop owners speak with one voice they make a difference," said Bob Redding, ASA's Washington, D.C., representative.

"Independent repair shops are the first line of defense for the consumer. Demanding the best parts and the best repair will fall prey to a process of cheaper and quicker repair under a system that allows no checks and balances," Redding said.

The legislation will now go before the full California Assembly for a vote.

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