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Letter to the Editor
This article originally appeared in the January, 1999 Issue of INSIGHT
©1999 Collision Repair Industry INSIGHTAll Rights Reserved
Coalition of ASA Affiliates Chooses to Disaffiliate Rather Than Sign New Agreement
PA Attorney General Sues Allstate Insurance Company Alleging Deceptive Claims Practices
CIECA Will Test Standards Compliance
INDUSTRY UPDATE
On December 5th 14 ASA affiliate groups that have refused to sign a new, modified affiliate agreement with the national Automotive Service Association (ASA) announced they will remain united as the Automotive Service Professionals (ASP).
The affiliate groups in question will continue to operate as independent local and state organizations, but share a common name – Automotive Service Professionals (ASP) – and logo. According to a news release issued by the group, during 1999 the former affiliates’ energies will be directed towards making a successful transition to operating without ASA affiliation. At this time the coalition has no plans to formulate a national agenda or formally establish a new national organization. Those options will be explored and discussed once the transition period is complete.
The following ASA affiliates either have, or expect to have, Board and/or membership approval to participate in the coalition: Albuquerque, Arizona, Georgia, Indiana, Kansas City, Kentucky, Maine, Massachusetts/Rhode Island, Michigan, Minnesota, Missouri, New Jersey, Pennsylvania and Texas. Together, they represent over 6,000 members of the automotive service industry. In addition, Automotive Service Professionals of Illinois, a trade group that re-organized itself after being disaffiliated by ASA national in 1997, requested and was accepted to participate in the coalition.
During 1999, a steering committee of six representatives was selected to lead the new coalition. They are: Judell Anderson, Minnesota; Jim Bastone, Pennsylvania; Connie Duer, Texas; Dave Lanspeary, Arizona; Dennis Liphardt, Michigan; and Jerry Schantz, Pennsylvania.
These events were precipitated by ASA national’s notice in September that the current affiliation agreements would be revoked and a new agreement put into place on 1/1/99. (Editor’s Note: See the Industry Update section in the December 1998 issue of INSIGHT.)
Given the limitations the new agreement placed on the affiliates’ ability to effectively represent the interests of their members, 14 of 21 affiliates refused to sign it. Several attempts by the affiliates to negotiate a more acceptable agreement were rebuffed by ASA national.
Despite national’s unwillingness to compromise, affiliate representatives attending the December 5th meeting continued to discuss possible strategies to salvage the affiliate-national relationship and help members “take back their association.” However, it was concluded that, without significant reforms being enacted in the ASA election process, it would be virtually an impossible task.
The new coalition has plans to meet twice during 1999. In April, the meeting will be held in Denver, Colorado, to coincide with the Collision 1 to 1 event. In November, the coalition will meet in conjunction with the Las Vegas Big I/SEMA show. o
Pennsylvania Attorney General Mike Fisher filed a lawsuit on December 8th against Allstate Insurance, claiming it illegally attempted to dissuade Pennsylvania consumers from obtaining legal counsel to settle their personal injury or property claims against Allstate policyholders.
Fisher said the suit alleges that Allstate Insurance Company, violated the Unfair Trade Practices and Consumer Protection Law and engaged in the Unauthorized Practice of Law.
"We believe Allstate intentionally set out to deceive these consumers by making them believe that they too were in 'Good Hands' when all the while the company was acting to protect its own financial interests," Fisher said.
According to the investigation, the defendant since 1995 has contacted Pennsylvania consumers who were not insured by Allstate, to inform them of the benefits of allowing the company to settle their claims without hiring an attorney.
These consumers received an Allstate “Quality Service Pledge” that claimed the insurance company would act in their interest, conduct a quick and fair investigation of the facts and determine if the potential claimant is eligible to receive compensation for any injuries or property losses.
Allstate also sent consumers a form titled “Do I Need An Attorney?” and a separate document that, once signed, would give the company authorization to obtain consumers’ medical and employment information.
In the “Do I Need An Attorney?” form, Allstate represented that:
- Seeking advice from an attorney is not necessary.
- According to a study by the Insurance Research Council, claims are settled faster if the potential claimant does not retain an attorney.
- It is in the best monetary interest of the consumer to deal directly with the insurance company. To obtain court approval for a claim involving a minor, the company would provide an attorney and pay the attorney’s fees.
"Consumers have the right to decide for themselves if they want an attorney. They should not base that decision on the series of deceptive statements that we contend Allstate was making," Fisher said. "I find it hard to believe that this insurance company can at the same time represent its policyholders and the very people who were injured. That’s just nonsense."
The suit also alleges that Allstate used deceptive tactics to convince consumers to allow the company full access to their medical and employment records. Potential claimants were not advised that the company could gather information unrelated to the claim itself. Allstate represented that the information would be used only during the claims handling process.
"What the consumer is not told is that this information may be used against them should they decide to sue Allstate’s clients," Fisher said. "Consumers have certain rights in these situations and should not be fooled into waiving those rights to their own detriment."
The lawsuit asks the court to:
- Issue a permanent injunction prohibiting Allstate from engaging in deceptive claims practices, including designating itself orally or in writing as the claims representative of a potential claimant.
- Require Allstate to comply with the state’s Consumer Protection and Insurance laws.
- Require Allstate to pay a $1,000 civil penalty per violation and a $3,000 penalty for each violation involving a person age 60 or older.
- Require Allstate to pay the Commonwealth’s costs of investigation and fees.
- Require Allstate to stop representing the Insurance Research Council as independent and non-biased.
Allstate disagrees with accusations in a lawsuit filed by the Pennsylvania Attorney General and feels strongly that the use of its claims information, including its Quality Service Pledge and “Do I Need An Attorney?” document, is protected by the First Amendment of the United States Constitution and Article I, Section 7, of the Pennsylvania Constitution, the company said.
“The controversy being created here is completely unjustified. People with a claim have a right to know what Allstate intends to do for them and they have a right to information about their options to seek a speedy and fair settlement,” says Allstate Assistant Vice President Deborah Campbell. “The distribution of these documents demonstrates Allstate’s intent to provide fair and quick settlements to all those involved in accidents with Allstate customers,” Campbell said.
Recognizing that compliance with its industry standards is critical, the Collision Industry Electronic Commerce Association is launching a program to test the compliance of industry vendors with its standards.
David Mittleman, National Marketing Director for Enterprise Rent A Car, and Chairman of the CIECA Board recently stated, “We feel CIECA owes it to the industry to ensure that vendors claiming compliance with CIECA standards can substantiate their claims, and that all vendors in compliance be recognized and commended. Generally, existence of the standards alone means nothing. It is only when they are employed in software that the industry gains from CIECA’s work.”
Recently, CIECA contacted CCC Information Services to discuss its announcement that their most recent family of products complies with CIECA standards for assignments and estimates. In his response, Jack Rozint, Sr. Vice President - Marketing, stated the announcement may have been somewhat misleading in saying that CCC has products that comply with CIECA 272 and 124 transactions for assignments and estimates, because these transactions are not yet standardized for shop use by CIECA. What was intended is that CCC’s products comply with the national standards for the 272 and 124 which CIECA is using to create collision industry standards.
Roger Cadaret, CIECA Executive Director said, “They are 90 percent of the way there, but we just felt we had to clarify the situation to avoid any confusion. CCC should be able to accommodate the CIECA standards very easily after they are completed and published.”
CIECA also credited CCC with using the CIECA Estimating-Management Standard (EMS) which is the means of sharing information between management and estimating systems. It was developed by CIECA early on, in response to the industry demand for a link between these systems. CCC’s Pathways product does employ the EMS Version 1.0 Standard.
There has been some concern about the manner in which CCC employed this standard, but the CIECA Interoperability Action Team has endorsed the application as compliant. There was a problem with the standard itself and it could not be used exactly as written. CCC developed a way to make it work, and assisted the team in correcting the problems. CCC is also working on employing EMS Version 2.0 in the near future; it includes all the corrections. Mitchell International, and ADP have also announced they will have EMS Version 2.0 built into their next releases.
“Now when all the management systems employ it they will all be able to talk to the estimating systems.” said Cadaret.
The 1998 International Autobody Congress and Exposition (NACE) show held from December 3-6 in Dallas, TX drew 32,000 registered attendees- down from 43,000 last year. The decline in attendance was attributed by most vendors INSIGHT spoke with to the lack of drawing power afforded by the Dallas location. Large paint supplier and computer system vendors want to drop Dallas from future city rotations for the exposition.
Las Vegas, the location of last year’s show, traditionally draws the best crowds.
The two ideas most often mentioned by vendors to increase floor traffic were:
- Making Las Vegas the home of NACE, dropping other city’s from the rotation; and
- Going to an bi-annual format similar to Automechanika.
Seminar attendance, however, was strong as usual. Several seminars, notably the ones on consolidation, co-moderated by Tony Molla, editor-in-chief of Cahner’s ABRN and Charlie Baker, publisher of INSIGHT, and the production techniques panel moderated by Sean Carey of Carter & Carter drew standing-room-only crowds.
With over 30 seminars during the event, NACE is still the premier educational venue for collision repairers in the world.
NACE 1999 will be held at the Georgia World Congress Center in Atlanta, GA from December 2-5.
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©1999 Collision Repair Industry INSIGHT
All Rights Reserved
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