Tuesday, 31 May 2005 17:00

California legislature busy with new CR statutes

The California legislature has been busy with several pieces of legislation related to the collision repair industry. Activity is taking place on AB 1163, SB 98, and AB 79. 

AB 1163 becomes two-year bill

AB 1163, sponsored by CAPA, would provide that certified aftermarket parts would be equal to the original manufacturer's parts. The bill was heard in the Assembly Business and Professions Committee on April 26. It became clear during the hearing that the bill did not have the necessary votes to pass. Assemblyman Yee requested that the measure become a two-year bill, which puts the bill on hold until next year's session, while not requiring it to be reintroduced from scratch.

Among the groups that testified against the bill were CAA, the Alliance of Automobile Manufacturers, and the California Motor Car Dealers.

SB 98 moves forward

As originally written, SB 98 would have eliminated the consumer's right to choose a repair facility by allowing insurers to "cap" repair costs based upon the initial estimate obtained from the shop selected by the insurer. CAA testified against this bill and provisions relating to "capping" repair costs were removed. The bill now provides that insurers may offer a "preferred provider program" to an insured in return for a "premium discount" if the insured agrees to have their vehicle repaired at a shop selected by the insurer - similar to the PPO programs in the health industry.

CAA continues to monitor this bill as it moves through the legislative process.

AB 79 introduced

AB 79 was introduced by Existing law, AB 1079 (Bermudez), passed unanimously in 2004 and prohibits the automotive repair dealer providing the services and the insurance company involved in the claim from being the "customer" because of the inherent conflict of interest.

The new bill would allow the insurance company to become the "customer" and make all repair decisions on the vehicle based on their best interests, not the insureds. It parallels with having the consumer give a health care "power of attorney" to their HMO/PPO provider to make all medical and health decisions. CAA is opposed to this bill.


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