NCOIL Avoids Action On Car Parts

By Steve Tuckey

NU Online News Service, March 7, 2:21 p.m.EST?State lawmakers once again have failed to move on acontroversial measure that would set requirements for the use ofgeneric, after-market parts to repair damaged vehicles.[@@]

By a 13-9 committee vote Friday the National Conference ofInsurance Legislators delayed consideration of a proposed model lawthat would require disclosure when parts not produced by the car'soriginal maker are used.

The model would also endorse certification of non-originalmanufacturer parts by organizations such as the CertifiedAutomotive Parts Association (CAPA).

NCOIL will again debate an after-market crash parts model billat its summer meeting. The organization's official posture on itsdecision was that it "moved legislators several steps forward tovoting on the model."

Parts usage has been a front-and-center issue for insurers since1999 when a jury returned a $1 billion verdict against State Farm,later reduced, for the company's arrangements for repair ofcustomers' damaged vehicles that allowed use of generic partswithout the policyholders' knowledge.

In the fall of 2002, the last time NCOIL took up the parts act,members tabled it after failing to reach consensus on the divisiveissue.

At Friday's session veteran NCOIL members opposed looking at theissue again while some newcomers thought the proposal hadmerit.

The issue pits the auto industry, as the Original EquipmentManufacturers, against independent after-market parts producersrepresented by CAPA, with the insurance industry generally favoringthe greatest number of options in using repair parts.

Michigan Sen. Alan Sanborn, R-Richmond Township, was one ofseven lawmakers from his state on the committee opposing taking updebate again.

"NCOIL has looked at this before and decided these parts werenot of sufficient quality," he said.

But South Carolina Rep. Dan Tripp, R-Greenville, said that as arelative newcomer he looked forward to an opportunity to cut autorepair costs.

NCOIL's president, Texas Rep. Craig Eiland, D-Galveston, said hewas concerned by the presence of several new members from Michiganon the Property-Casualty Committee for the seeming purpose ofdefeating the bill. But, he said he had decided there was nothingthat could be done to alter the situation.

The proposed model would set up a mechanism to certifyindependently produced after-market auto parts through CAPA.

Auto industry representatives on hand Friday asserted that suchparts actually increased costs since at times they were moredifficult to install than those produced for the car by the automanufacturer.

But CAPA spokesperson Jack Gillis said that such claims weremerely attempts by the car makers group to maintain a monopoly thatwas costly for consumers.

Vermont Rep. Virginia Milkey, D-Brattleboro, said she opposedthe measure because she did not feel it was right to legislate amonopoly on CAPA to certify independently produced after-marketparts.

"Plus, I don't think they are that good," she said.

Insurance trade groups for the most part remained silent at themeeting with the exception of American Insurance Association vicepresident Dave Snyder, who said he favored a third option put intothe bill that would allow any parts to be used and have theinsurance company provide a lifetime warranty on them.

"Because current law in most places allows for more option forconsumers and insurers than would be provided under this model, weurge NCOIL not to act on this proposal," he said.

The current model will most likely face revision over the nextfew months before the summer hearing at which time final actionwould seem unlikely, said NCOIL executive director Susan Nolan.