Aarons introduced Representatives Clancy Jayne (R-District 6) and Gary Pierce (R-District 19), sponsors of this successful legislation, as "heroes." Representative Jayne congratulated the group, stating that "legislation like this doesn't pass the first time in a hundred years!" Jayne attributes this success to the grassroots effort put forth by the team. "Nobody worried about who got the credit to get the job done - they just did it," stated Jayne. "The insurance industry is the strongest lobby in the world, which makes the passing of this legislation even more significant. Over 700 letters were written to the Arizona legislature in support of HB 2468. That is a phenomenal event. Small business has few friends; the grassroots contact really worked."

 

Pierce joins the team

Representative Jayne was responsible for introducing the bill in its original form - prohibiting insurer-owned body shops. When the bill shifted to anti-steering legislation, Representative Pierce became a sponsor as well. Aarons, Jayne and Pierce rewrote the legislation, working in conjunction with the insurance lobby, to achieve preliminary goals this first year. "We couldn't be too heavy handed, " explained Pierce. "We would have lost too many votes." Eventually, HB 2468 was passed with virtually unanimous support.

HB 2468 includes anti-steering provisions that protect consumer choice and place limitations on the claims adjuster making repair decisions, thereby protecting the competitive market. The bill has mandatory reporting requirements with stiff penalties for violations of the bill.

Lobbyist Aarons wrote in his legislative review, "This is a significant step towards addressing the steering that occurs daily in our industry, but we believe we still have a long road ahead of us in addressing this problem. Currently, adjusters are sent into our shops to negotiate costs and repairs for damaged vehicles. While the relationship the adjuster has with an insurance company hasn't been a concern - adjusters that work for insurance company that have tied-repair facilities now raise significant concerns. Those adjusters could report back competitive, sensitive, store-specific information.

Substance of the bill

"The bill now states '... If an insurer or claimant selects a repair facility to repair the insured's or claimant's motor vehicle in which the insurer owns an interest in that repair facility, the adjuster for the motor vehicle shall not be employed by the repair facility or have any direct authority over that facility's recommendations or decisions relating to the repair of the insured's or claimant's motor vehicle.'"

He continued, "Reporting is critical if we are to have the evidence necessary to pursue prohibition in the future. The reporting language states an insurance company that owns an interest in a tied repair facility has to file with the director of the department of insurance a statement delineating the number of motor vehicles repaired and the dollar values of those repairs in absolute numbers as a percentage of the total number of motor vehicles repaired.

"While these reports are confidential, the department is required to make the information available to the President of the Senate and the Speaker of the House of Representatives upon request. That means the legislators will have access enabling us to get the proper questions asked and answered at the legislative level.