Thursday, 31 March 2005 17:00

CA bill blurs differences between OEM and non-OEM parts

A bill introduced in the California legislature in February would establish a legal presumption that "certified" non-OEM crash parts are legally of "like kind and quality" to OEM parts. Assembly Bill 1163 (AB 1163) would also invalidate the current law that prohibits an insurer from requiring the use of non-OEM parts unless the vehicle owner is told of and approves the use of such parts on his car, replacing it with the requirement that the following statement appear on the estimate: "This estimate has been prepared based on the use of crash parts supplied by the manufacturer of your vehicle or certified aftermarket crash parts supplied by an independent manufacturer." 

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The bill would also state that both the aftermarket crash parts distributor and the insurer warranty the parts. For some insurers this represents a change in policy, as many have traditionally insisted that they have no legal responsibility for the repair, preferring to tell consumers only that they "stand behind" repairs done at their direct repair facilities.

The bill was introduced by Assemblyman Leland Yee (Democrat - San Francisco), who is the Speaker Pro Tem of the Assembly and a member of the Business and Professions committee. Yee, who holds a Ph.D in psychology and whose past legislation has focused largely on education and children's issues, was approached by Jack Gillis of CAPA and asked to introduce the bill as a consumer issue according to Yee's spokesman, Adam Keigwin, who said Gillis is also "likely to testify on the bill."

"His (Yee's) interest is in finding a way to protect consumers from the high cost of auto repairs," said Keigwin. "The little guy often is the one who cannot afford to get his or her car repaired using OEM parts. Rather than fixing the car, the insurer will 'total' the car." The assemblyman feels that, with this bill, insurers are more apt to repair than 'total' the car, according to the spokesman. The bill would set up qualifications for any company that wished to act as a certifier of aftermarket crash parts. Based on the standards set by the bill for an "Independent third-party certifier," CAPA would be a likely candidate for the job.

CAA opposes bill

The California Autobody Association (CAA) has taken a position against the bill, sending a letter to the chairman of the Assembly Business and Professions Committee stating that "97% of the repair shops surveyed believe that certified aftermarket crash parts do not meet the same standards as OEM parts."

"We are in opposition to the bill," said David McClune, executive director CAA, although he later noted that at this time CAA is keeping "a low profile" on the matter. He said he expects the California Motor Car Dealers Association (CMCDA), traditionally a strong lobbying presence in Sacramento, to oppose to the bill but a CMCDA spokesman said no action has been taken as yet. McClune also noted that the insurance industry has not had a lot to say about the bill.

Highlights of Assembly Bill 1163

FEBRUARY 22, 2005

SECTION 1. The purposes of this act are as follows:(a) To protect consumers by encouraging collision repair shops to use only car company or certified aftermarket parts. (b) To require notification by the collision repair shop or insurance estimate as to the use of certified aftermarket parts. (c) To require notification regarding identification by mechanized processes or systems of all crash parts, including car company or certified aftermarket parts, used to repair the vehicle.

SEC. 2. Section 9875 of the Business and Professions Code is amended to read: 9875. (a)... (b) "Aftermarket crash part" means a motor vehicle replacement part manufactured by other than the original equipment manufacturer, for any of the nonmechanical parts made of sheet metal, plastic fiberglass, or a similar material, that generally constitute the exterior of a motor vehicle. This includes outer panels, hoods, fenders, doors, trunk lids, and exterior coverings of bumpers, but does not include windows or hubcaps. (c) "Car company" means a motor vehicle manufacturer or distributor that produces or markets crash parts under its own name... (d) "Noncar company" or "independent manufacturer" means a manufacturer or distributor that produces or markets aftermarket crash parts under its own name for use in motor vehicles that it does not manufacture or distribute. (e) "Independent third-party certifier" means a certifying entity that is registered with the Director of Consumer Affairs and meets all of the following requirements: (1) Accreditation to the International Organization for Standardization (ISO) Guide 25: General requirements for the competence of calibration and testing laboratories for the automotive industry. (2) Accreditation to the International Organization for Stand-ardization (IS0) Guide 62: General requirements for bodies operation assessment and certification/registration of quality systems for the automotive industry. (3) Formal accreditation by the American National Standards Institute (ANSI) as a standards developer. (f) "Certified aftermarket crash part" means an aftermarket crash part for which a certification has been issued by an independent third-party certifier. A certified aftermarket crash part shall be warranted by the manufacturer, distributor, or the insurer as being equivalent to or exceeding the part placed on the vehicle during initial assembly in terms of fit, finish, quality, and performance .

SEC. 3. Section 9875.1 of the Business and Professions Code is repealed. (Editor's note: This is the section that presently requires written notice/approval if aftermarket parts are to be used in the repair.)

SEC. 4. Section 9875.1 is added to the Business and Professions Code, to read: 9875.1. In all instances, the written estimate prepared by an insurer or repair facility, or both, shall meet the following requirements:(a) Clearly identify the manufacturer of each part so long as the manufacturer can be identified by automated processes or through the manufacturer's warranty. (b) A notification shall be attached to, or included in, the estimate and shall contain the following information in 10-point type or larger type: "THIS ESTIMATE HAS BEEN PREPARED BASED ON THE USE OF CRASH PARTS SUPPLIED BY THE MANUFACTURER OF YOUR VEHICLE OR CERTIFIED AFTERMARKET CRASH PARTS SUPPLIED BY AN INDEPENDENT MANUFACTURER. ALL AFTER-MARKET CRASH PARTS USED IN THE PREPARATION OF THIS ESTIMATE ARE WARRANTED BY THE MANUFACTURER OR DISTRIBUTOR OF THE PARTS AND THE INSURER FOR WHICH THE ESTIMATE WAS WRITTEN."

SEC. 5. Section 9875.3 is added to the Business and Professions Code, to read: 9875.3. A person, including an individual, company, or agent, may not impose a penalty upon a person leasing or financing a vehicle who repairs the vehicle using certified aftermarket crash parts.

SEC. 6. Section 9875.4 is added to the Business and Professions Code, to read: 9875.4. Noncar company certified aftermarket crash parts used to repair a motor vehicle shall be presumed to be of like kind and quality to car company parts.