NCOIL Eyes Aftermarket Parts Model

By Steve Tuckey

NU Online News Service, March 2, 4:24 p.m. EST?The spring session of the National Conference of Insurance Legislators will again tackle the issue of auto crash repairs with parts not made by the original manufacturer, according to executive director Susan Nolan.[@@]

The meeting starts today and will go through Sunday in Hilton Head Island, S.C.

Ms. Nolan said the proposed model would endorse certification of aftermarket parts by third-party organizations, such as the Certified Aftermarket Parts Association (CAPA) and would require disclosure as to the use of such parts.

NCOIL considered such a model in 2002 but put off further deliberations until the meeting this spring.

Numerous interested parties will attend including representatives of car companies, CAPA and Keystone Automotive, a manufacturer of aftermarket crash parts. "This promises to be an intense debate over the safety of certified aftermarket crash parts," Ms. Nolan said.

According to Robert Zeman, senior vice president for the Property Casualty Insurers Association of America, the issue pits auto manufacturers against producers of aftermarket crash parts with the interest of the insurance industry remaining to maintain competition.

"This model is a good step in the right direction in that it creates a presumption that certified aftermarket parts can be safe," Mr. Zeman said.

Car parts became a major issue in 1999 after an Illinois jury verdict against State Farm that found the company had defrauded customers by allowing the use of generic parts for repairs without telling them and slapped the company with a substantial judgment. Originally more than $1 billion was reduced on appeal.

Peter Bisbecos of the National Association of Mutual Insurance Companies noted that prior to the Illinois decision the use of non-original equipment manufactured (OEM) parts was a common practice.

"After the stunning ruling, many insurance companies, not even parties to the litigation, discontinued the use of non-OEM parts because they no longer knew the risks would face," Mr. Bisbecos said.

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NCOIL Eyes Aftermarket Parts Model

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