Your Source for Up-To-Date News and Research on the Collision Repair Industry 

 

click here to subscribe to the FREE INSIGHT Editor's Desk News Alert Email

SUBSCRIBERS-ONLY
Today's News
INSIGHT This Month
INSIGHT Archives
Survey Center
Letter to the Editor

Business Tools
Subscription Information
CSI Reporting
Financial Analysis
IRS Audit Guide

Management/
Technical Info
Market Watch Rates
INSIGHT Inside this month's issue...

Feedback
Letter to the Editor

ASA and ASC Testify at Michigan Senate Insurance Committee Hearing on Insurer-Owned Repair

The legislation prohibits insurance companies from owning or acquiring a repair facility in the state of Michigan. If an insurer has ownership of a repair facility, it must divest itself of that facility within two years of the effective date of the legislation. S. 819 was introduced by Sen. Laura Toy, R-Livonia. The bill has 16 co-sponsors.

Its companion bill in the Michigan House of Representatives, H.R. 5460, was introduced by Rep. Ken Daniels, D-Detroit. The House bill allows insurers who own repair facilities as of Jan. 1, 2004, to retain their ownership.

“ASC-MI opposes insurance companies having an ownership interest in automotive repair facilities and views such ownership as being in direct conflict of interest. It eliminates the checks-and-balances system that assures consumer protection. Direct ownership raises barriers for the consumer and forces them to choose the path of least resistance to assure prompt attention to their repair needs. ASC has historically supported the consumer’s absolute, unequivocal right to choose a repair facility for a collision or mechanical repair,” said Ron Meyer, president of ASC-MI.

“When the body shop is owned by the insurance company, the consumer is the one who loses,” Meyer said. “If they have a problem with the repair, whom do they turn to?”

Bob Redding, ASA’s Washington, D.C., representative, said in his testimony, “We are grateful for Senator Laura Toy’s leadership with the bill’s introduction, as well as the support shown by those of you who have co-sponsored the legislation. We would also like to recognize the leadership of the Automotive Service Councils of Michigan on this legislation.

“We are now at a point where some insurers are determined to eliminate the last line of defense for the vehicle owner, the independent repair facility,” Redding added. “Repairers in many states are asking policymakers to stop insurance companies from owning repair facilities. Legislation has been introduced in eight states already this year. ASA expects more to follow. Last year, Texas passed legislation halting insurance companies from owning repair facilities in their state.”

©2004 Collision Repair Industry INSIGHT
All Rights Reserved

FEATURED
LINKS:

INSIGHT Supports the NABC!
Do You?