On May 20, Minnesota State Rep. Mary Franson (R) introduced House File 2919, an aggressive bill targeting insurer steering and price-driven part selection.
Already, a repair procedure bill, House File 2234, has been introduced which was sponsored by Rep. Ruth Richardson (DFL) and is eligible for consideration during the 2020 legislative session which begins February 11, 2020.
HF 2919 would strictly address the issue of steering by prohibiting insurance companies from “suggesting or requiring as a condition of payment of a claim that repairs to any damaged vehicle must be made by a particular contractor or repair shop or that parts, other than window glass, must be replaced with parts other than OE parts.”
While current Minnesota law prevents insurers from “engaging in any act or practice of intimidation, coercion, threat, incentive or inducements for or against an insured to use a particular contract or repair shop,” HF 2919 would remove the exception for “benefits included within preferred vendor programs.” This would force insurers to adhere to the requirement regardless of whether the consumer used a DRP shop or a non-DRP shop.
Current law only prevents insurers from attempting to influence shop choice after the consumers have chosen a shop. However, this legislation would prohibit any attempt at influencing shop choice, including insurance companies offering to refer the consumer to a shop.
MN 72A.201, Subdivision 6, Clause (7) allows carriers to request recycled parts, though it forbids them from requiring policyholders to accept any aftermarket parts other than glass, and despite the intent of HF 2234 to prohibit insurers from conditioning payment on procedures and specifications that conflict with OEM recommendations, it defers to Clause (7), thus allowing insurers the right to request recycled parts even if contrary to OEM’s recommended procedures and specifications.
HF 2919 expands upon this concept by prohibiting insurers from “specify[ing] a price for a part or other materials necessary for the satisfactory repair of the vehicle.”
Additionally, under HF 2919, insurers would be unable to “disregard a repair operation or cost identified by an estimating system,” removing the leeway provided by the inclusion of the terms “unilaterally and arbitrarily” in current state law.
Language in HF 2919 also prohibits insurers’ ability to “disregard a repair operation or cost identified by an estimating system, including the system’s procedural pages and any repair, process or procedure recommended by the OEM of a part or product.”