NU Online News Service, March 12, 3:15 p.m. EST
The National Conference of Insurance Legislators said it is getting closer to resolving differences over model legislation to set quality standards for auto crash replacement parts.
Susan Nolan, NCOIL executive director, said discussions at the organization's recent spring meeting put the group "closer than it has ever been" to resolving differences over a parts measure.
In July NCOIL is scheduled to hold its summer meeting in Boston where issues involved in the parts model legislation will be debated further.
There is still disagreement between the auto manufacturers and after-market part makers over the use of original equipment manufacturers' parts, according to a statement released by NCOIL and confirmed by Ms. Nolan.
NCOIL said the two parties had a contentious debate over the quality of the parts, with each accusing the other of not producing quality products.
Repair parts quality has been an issue for insurers since 1999, when an Illinois jury, in a verdict that was later vacated, awarded $1.2 billion to plaintiffs in a class action against State Farm for allegedly failing to disclose flaws in after-market parts used for repairs.
NCOIL reported that after debate at its meeting some changes had been made in the draft model language to reflect industry usage, and the removal of one component concerning insurance company steering to repair facilities.
As it now stands, lawmakers still need to discuss language concerning two sections. One is automotive repair centers' notification to customers about the use of parts and estimate of labor, and the other pertains to insurer specification of replacement parts after a crash.
That section would require insurers to incorporate language in auto insurance policies concerning the use of after-market parts and warranty and quality of those parts.
Candace Thorson, deputy executive director for NCOIL, explained that language over what would determine the quality standard of the parts was inadvertently omitted from an October 2009 draft, and was reinserted.
Another insert in the model legislation, yet to be debated, concerns whether insurers would be responsible for the cost of modification of replacement parts.
The steering measure, which would assure customers have the option of choosing their auto repair facility, is to be developed and debated separately, the executives said.
