NCOIL To Move Forward On Aftermarket Crash Parts Model

The aftermarket crash parts measure sparked some debate over what, if any further standards should be put in place regarding the use of aftermarket parts.

Insurers generally favor the use of cheaper aftermarket parts, but their use has been opposed by auto manufacturers and some consumer advocates who argue they pose a safety risk.

The proposed model act on aftermarket crash parts, designed to promote transparency and accountability in the auto repair industry, would require "notice and approval before crash part repair or replacement and [establish] conditions whereby insurers may require use of aftermarket crash parts. The model also mandates permanent, transparent identification of parts, allows consumers to pick their auto repair facility, and promotes accountability, among other things."

Bob Passmore, senior director of personal lines policy at the Property Casualty Insurers Association of America (PCI), said PCI objects to the model because it is unnecessary, limits competition and creates compliance requirements that current estimating software cannot comply with.

Mr. Passmore said many states already have laws regarding the identification of parts. Additionally, he said the NAIC has a model that puts standards in place for aftermarket parts.

The proposed NCOIL model, he said, adds levels of detail on top of these existing requirements. It also creates requirements about where the disclosures should appear on repair estimates, and what fonts should be used. This level of detail, Mr. Passmore said, is beyond the capabilities of estimating software.

He said the model is not just about disclosure; it is about trying to eliminate competition for car company replacement parts.

The airbag model was designed to be an anti-fraud measure to address the sale of stolen airbags. But discussions soon turned to using aftermarket and recycled airbags.

Rhode Island State Rep. Brian Kennedy, D-Hopkinton., who sponsored the model act, said, "What began as a review of a straightforward anti-fraud model to combat the illegal sale of stolen airbags shifted quickly to debate over the pros and cons of using aftermarket and recycled airbags.

"It became clear that only through more detailed discussion and review of airbag issues by members of the P&C Committee and interested parties could we develop a model law with which we'd feel comfortable and that addresses a potentially dangerous practice."

Susan Nolan, executive director of NCOIL, said despite insurer concerns, NCOIL feels a model act on aftermarket parts is necessary. She said NCOIL will hold conference calls and revise the current models but plans to move forward after considering all of the comments.