Monday, 07 March 2011 19:17

Amended Arizona Anti-Steering, Inspection Bill Passes Caucus Vote

An Arizona bill that could adapt the state's insurance code to include language about auto glass inspections passed the state Senate's majority and minority caucuses March 1, and now will proceed to the committee of the whole, and, after that, a third reading before the full state Senate. The bill, sponsored by Sen. John McComish, contains several provisions related to the industry, including one that would prohibit insurers and third-party administrators (TPAs) from causing "a delay in the inspection of a policyholder's auto glass condition in the handling of a policyholder's claim regardless of which repair facility the policyholder chooses."

Though the original bill contained a provision that would have prohibited insurers and TPAS from having a financial interest in auto glass replacement companies, that provision was removed by the Banking and Insurance Committee, which voted to pass the amended bill in February.

The committee also had voted to remove a provision in the bill that would have required that, in the case of an auto glass inspection, "the inspector must be a direct employee of the insurer or an independent party who is unrelated and unaffiliated with any glass repair facility."

The current language of the bill allows TPAs to recommend a glass repair facility to a customer, but requires when doing so, that they "inform the person of the right prescribed … to choose any glass repair facility for the repair of the loss relating to motor vehicle glass at the same time as making the recommendation or providing information."

However, it prohibits independent adjusters, auto damage appraisers or claims inspectors from making a glass shop recommendation.

Sen. McComish had advised previously that the amendments to the original bill wording came from work with both insurance company representatives and representatives for Safelite.

"After talking with the insurance people as well as Safelite as well as those representing the independent installers, we decided to soften the bill to provide a penalty for those that are steering, as opposed to the original bill, which would alter the business model for someone like Safelite," he said. "The revised version of the amendment provides penalties for those that do the steering, but doesn't affect Safelite's business model."