Local news stories affecting the auto body industry in California, Nevada, Oregon, Washington, Idaho, Montana, Hawaii, Alaska and Wyoming
Attorney General Edmund G. Brown Jr. has announced that he has asked to intervene in a lawsuit in order to protect newly adopted motor vehicle emission standards that are estimated to save nearly two billion barrels of oil and reduce greenhouse gas emissions by approximately one billion tons.
Brown filed a motion to intervene in the U.S. Court of Appeals in support of the federal Environmental Protection Agency (EPA) in a suit brought by energy companies and other industries challenging the EPA's authority to enforce the tough emission standards beginning in 2012.
"The thousands of barrels of oil spilling in the Gulf of Mexico each day are a graphic reminder that we need to cut oil consumption in America," said Brown. "These regulations would do that, as well as vastly reducing pollution from tailpipe emissions."
The fallout from the Orange County auto body sting operation which swept up 53 shop owners and estimators earlier this month has already cost many of those implicated their DRP arrangements. Several major shops involved, with the notable exception of two of the state’s three Sterling shops owned by Allstate, have already had their DRPs cancelled by their insurer partners.
Details of the specific charges are still forthcoming, but those involved will likely be charged under CP code 550b(2), which reads, in part:
(b) It is unlawful to do, or to knowingly assist or conspire with any person to do, any of the following:
(1) Present or cause to be presented any written or oral statement as part of, or in support of or opposition to, a claim for payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false or misleading information concerning any material fact.
(2) Prepare or make any written or oral statement that is intended to be presented to any insurer or any insurance claimant in connection with, or in support of or opposition to, any claim or payment or other benefit pursuant to an insurance policy, knowing that the statement contains any false or misleading information concerning any material fact.
More than 300 auto industry representatives, community leaders, students, faculty and administrators celebrated the official grand opening of the 10,000 square-foot Automotive Partners Building at Cerritos College on Friday, May 21.
The event, held inside the facility's glass-lined showroom, marked the culmination of years of planning, fundraising and collaboration between the college, public officials and local auto dealers. Cerritos College apportioned community bond funding toward the $5.1-million facility, and major private donors included the Southland Motor Car Dealers Association (SMCDA) and the Greater Los Angeles New Car Dealers Association (GLANCDA), who each contributed a half million dollars toward the facility. L. A. County 4th District Supervisor Don Knabe and the Conant Auto Retail Group each provided gifts of $100,000.
The largest state collision association in the U.S., the California Autobody Association (CAA), formed in 1967 by merging two organizations in Glendale and Long Beach, making it the first group to represent the industry throughout all of California. Now, at age 43 and based in Sacramento, the CAA represents 1,000 members in 18 chapters from San Diego to Eureka.
“Some of our members do have mechanical facilities, and we have dealership body shops as members, but primarily, most members are independent collision repair shops,” explains David McClune, executive director and chief operating officer for the association.
Six state board members represent the CAA executive committee. The 2010 president is Gigi Walker, owner of Walker’s Auto Body in Concord. She notes: “An association is a place for knowledge, camaraderie and keeping up to date with legal issues facing an industry—and the CAA is fulfilling all of those roles admirably.”
McClune explains that the organization has been consistently involved in the issues facing the country’s most populous state—for cars and people.
In the ‘70s, the CAA was involved when the Bureau of Automotive Repairswas started in 1972. BAR oversees automotive repair operations in the state.
A $50 million investment will create a partnership between Toyota Motor Corporation and Tesla Motors to produce electric vehicles and bring jobs back to the former plant owned by GM-Toyota called the New United Motor Manufacturing (NUMMI) plant in Fremont, CA, said the smiling CEOs on May 21.
Earlier this month Congresswoman Jackie Speier (D-San Francisco/San Mateo) launched her own exploration of the structural differences between certain vehicle safety parts by sawing through an aftermarket reinforcement bar in her San Mateo district office. The reciprocating saw she used didn’t dent the bar from the vehicle manufacturer.
Speier, author of California’s anti-steering law, stated, “I’m concerned that vehicle owners who’ve been in an accident are unaware that replacing a reinforcement bar with one not designed by the manufacturer may compromise the safety of vehicle occupants in a subsequent collision. Airbag deployment can be thrown off by a reinforcement bar that doesn’t absorb shock in the way intended by the vehicle manufacturer.”
Speier conducted the test with the help of two collision industry experts: Lee Amaradio, president of the Collision Repair Association of California and Allen Wood, the association’s executive director.
Amaradio stated, “The congresswoman has always taken time to hear our industry’s concerns. The issue of aftermarket safety parts is of national importance. Hundreds of thousands of vehicle owners are driving around in repaired cars that won’t withstand a collision the way the manufacturer intended.”
The California Insurance Commissioner's office has released the following NOTICE, saying, in part, that
California Code of Regulations, Title 10, Chapter 5, Subchapter 7.5, Article 1, Fair Claims Settlement Practices Regulations, Section 2695.8(g) reads:
g) No insurer shall require the use of non-original equipment manufacture replacement crash parts in the repair of an automobile unless:
(1) the parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit, and performance;
(2) insurers specifying the use of non-original equipment manufacturer replacement crash parts shall pay the cost of any modifications to the parts which may become necessary to effect the repair; and,
(3) insurers specifying the use of non-original equipment manufacture replacement crash parts warrant that such parts are of like kind, quality, safety, fit, and performance as original equipment manufacturer replacement crash parts; and,
(4) all original and non-original manufacture replacement crash parts, manufactured after the effective date of this subchapter, when supplied by repair shops shall carry sufficient permanent, non-removable identification so as to identify the manufacturer. Such identification shall be accessible to the greatest extent possible after installation; and,
(5) the use of non-original equipment manufacturer replacement crash parts is disclosed in accordance with section 9875 of the California Business and Professions Code.
Requirement for Permanent, Non-Removable Identification.
Insurers are reminded that CCR Section 2695.8(g)(4) requires that “all original and non-original manufacture replacement crash parts, manufactured after the effective date of this subchapter, when supplied by repair shops shall carry sufficient permanent, non-removable identification so as to identify the manufacturer.” An admitted insurer shall not require that a repair shop install non-original manufacture replacement crash parts, or limit payment to the cost of a non-original manufacture replacement crash part, unless those parts comply with section 2695.8(g)(4) and carry sufficient permanent, non-removable identification so as to identify the manufacturer. An admitted insurer shall not limit payment to the cost of a non-original manufacture replacement crash part for any part that does not carry sufficient permanent, non-removable identification so as to identify the manufacturer.
Use of Non-Original Equipment Manufacture Replacement Crash Parts.
Insurers are also reminded that CCR Section 2695.8(g)(1) provides that no insurer shall require the use of non-original equipment manufacture replacement crash parts in the repair of an automobile unless “the parts are at least equal to the original equipment manufacturer parts in terms of kind, quality, safety, fit, and performance” (emphasis added). CCR Section 2695.8(g)(3) requires that “insurers specifying the use of non-original equipment manufacture replacement crash parts warrant that such parts are of like kind, quality, safety, fit, and performance as original equipment manufacturer replacement crash parts.” The required use, or payment of the cost, of a non-original equipment manufacturer replacement crash part that is not equal in terms of like kind, quality, safety, fit, and performance as compared to the original equipment manufacturer replacement part may subject the insurer to further action by this Department.
It has come to the Department’s attention that certain aftermarket bumper reinforcement bars may be significantly different in terms of like kind, quality, safety, fit, and performance as compared to the original equipment manufacturer replacement part. All insurers doing business in California are reminded of the above noted standards for the use of non-original equipment manufacturer (aftermarket) replacement crash parts.
Any questions should be directed to Teresa Campbell, Senior Staff Counsel, at (415) 538-4126 or email@example.com.
The California Department of Insurance (CDI) has sent a notice (see also related stories) to all California insurers reminding them of their requirement to warrant all non-original equipment manufacture replacement crash parts to be at least equal to original equipment in terms of kind, quality, safety, fit, and performance. This reinforces their liability in the process. The CDI also warned insurers as to the use of non-compliant parts in settlement offers.
CRA President Lee Amaradio Stated "This official notice was the culmination of numerous meetings with CDI, numerous letters written that required a response from the Commissioner and a press conference that was held by Assembly Member Dave Jones in which Toby Chess was a participant. We have received numerous calls from the Industry asking, why our position is so drastically different than CAA, and why are they claiming that the notice is a result of their efforts. First and foremost they are entitled to their position. Their position was limited to tracking and identification of parts. The only entity that voiced similar views is the Aftermarket parts industry. Our Position is based on the law and before you make a decision you should take time to review the regulations and statutes that relate to this issue."
Amaradio added, "When Non-compliant parts are used to establish settlement the claim is paid short. CRA's position is to protect the consumer and have CDI enforce the laws and regulations that require insurers to warrant non-original equipment replacement crash parts are at least equal. Determinations of parts being equal is manifested in the claims process, prior to repair.
We feel that, to categorize tracking as the most important issue, is to divert attention from the real issue. Insurers requiring and specifying usage of parts that are non-compliant. It is important to note how the CDI notice tracks with our letters to the Commissioner. If there is a small scale issue it is tracking . Currently systems exist to track parts. It is not done because insurers chose not to comply. The real issue is vehicle and occupant safety ."
An exchange of letters between CRA and Commissioner Poizner’s office has highlighted both agreements and disagreements on the state of aftermarket parts regulation.