Massachusetts must conduct the first auto body labor rate survey under its new permanent advisory board no later than Jan. 1, 2027, according to the Division of Insurance.
The board was created by Section 78 of the state's fiscal year 2027 budget, which Gov. Maura Healey signed July 9, according to the state budget summary site. The provision adds two sections to Chapter 175 of the Massachusetts General Laws. A separate section of the same measure, Section 134, sets the survey deadline, according to the Division of Insurance's board page and the Auto Damage Appraiser Licensing Board's Sept. 1 meeting notice.
Survey compiles contracted and posted hourly rates, and the board collects industry data
The board creates and oversees the Massachusetts auto body labor rate survey, which goes to the auto body shops and insurers the board determines are relevant, according to the law's text. The survey compiles contracted and posted hourly labor reimbursement rates, along with any other information the board considers relevant.
The board must also gather data on nearby states' labor reimbursement rates, total labor and repair costs, inflation, workforce data, vocational school trends, and auto insurance premiums, among other data, the law states.
The law limits the survey to no more than once every four years and directs the commissioner of insurance to issue it every four years. The board files a report of its findings and conclusions, along with any recommendations from individual board members, by Dec. 31 every fourth year with the clerk of the Senate and House of Representatives, the Joint Committee on Financial Services, the Senate and House Ways and Means committees, and the Division of Insurance.
Rate hearing required if the commissioner finds no reasonable degree of competition
At least once every four years, the commissioner must examine the survey's findings for evidence on whether the auto body repair market has a reasonable degree of competition, according to the law. If the commissioner concludes the market does not, the law says the commissioner "shall implement a full rate hearing" to set a minimum labor reimbursement rate for the state or a region. In setting a rate, the commissioner must also weigh the best available market data on auto body repairs and the insurance claims that result, as well as the effect on coverage premiums, including, among other things, phasing a rate in over no more than three years.
The five-member board includes appointees of the commissioner of insurance and the attorney general, who serve as co-chairs, according to the law. The Massachusetts Insurance Federation names the insurance industry member, the Massachusetts Auto Body Association names the repair industry member, and the Massachusetts State Automobile Dealers Association names the fifth member. Members may serve up to three consecutive two-year terms, and the board must meet at least once a year, the law states.
