Be it enacted by the Senate and House
of Representatives in General Court assembled, and by the authority of the
same, as follows:
SECTION 1. Section 8E of chapter 26 of the General Laws, as appearing in the 2006 Official Edition, is hereby amended by inserting after the fifth paragraph the following paragraph:—
The commissioner shall instruct the bureau to conduct a market conduct study of the direct payment and referral repair shop plans by motor vehicle insurers no less than every three years with an initial study no later than December 31, 2008. Said market conduct study shall, at the minimum, examine the implementation of the direct pay and referral systems and their financial impact on consumers, on body shop owners, and on the system as a whole, including cost savings measures. Said market conduct study shall include a review of compliance with the thirteenth paragraph of Section 34O of chapter 90 subsection (b) of the General Laws and 211 CMR 123, 211 CMR 133 and 212 CMR 2.00. Said study shall report the results of such investigation and study and its recommendations, if any, together with drafts of legislation to the joint committee on financial services.
SECTION 2: Section 8G of said chapter 26, as so appearing, is hereby amended by striking out the eighteenth paragraph and inserting in place thereof the following paragraph:—
No insurer or appraiser shall require, suggest, request, or recommend that any appraisals or repairs should or should not be made in a specified registered repair facility or facilities authorized under section 34O of chapter 90 or otherwise, nor shall an insurer or appraiser use coercion or intimidation to cause appraisals or repairs to be made or not made, in any specified repair facility or facilities, unless otherwise permitted by this section or section 34O of chapter 90 and by section 113O of chapter 175. No insurer or appraiser shall inquire of the insured’s desired location of repair and repair shop facility. The insurer must disclose that they guarantee the work of all licensed and registered repair shops that do business in the commonwealth. Any violations of this paragraph that constitute a pattern of behavior, determined by the commissioner, shall constitute a violation of chapter 176D and shall be enforced by the commissioner.
Any violations of this paragraph that constitute a pattern of behavior, as determined by the commissioner, shall constitute a violation of chapter 176D of the General Laws and shall be enforced by the commissioner. Failure to comply with the provisions of the above paragraph will result in a fine of not less than $300.00 or more than $500.00 for each incident cited in the determined patter of behavior, and shall be payable to the division of insurance by the insurer. A violation of the above paragraph shall be considered an unfair claims settlement practice in the business of insurance in addition to those practices set forth in section 9 of chapter 176D
SECTION 3: Said section 8G of said chapter 26, as so appearing, is hereby amended by striking out the nineteenth paragraph and inserting in place thereof the following paragraphs:—
Notwithstanding the provision of any law or regulation to the contrary, an insurer shall not be required to assign an appraiser if the amount of the loss, less any applicable deductible, is less than $3,000.00. When a shop requests a new appraisal or supplementary allowance and the insurer and a repair shop agree to an expedited repair process, the shop shall electronically submit an itemized estimate of the original cost of repairing the damaged vehicle, or in the case of a request for a supplementary allowance, the additional cost necessary to complete the repairs of the damaged vehicle, together with such supporting information as may be required. The insurer shall be required to provide a licensed appraiser as authorized under this chapter to review all original and supplemental allowance repair requests. Further, the insurer shall be required to communicate with the repair shop within 2 business days as to whether it accepts the requested new appraisal or supplementary allowance. If the insurer accepts the new appraisal or supplementary allowance, the repair shop shall proceed with the completion of the repairs as agreed and payment in full shall be remitted within 5 business days following completion of the repairs unless another mutually agreed upon payment process is in place between the insurer and the repair shop. In the event that an insurer does not accept in full the requested new appraisal or supplementary allowance or if the insurer fails to respond to the repair shop within 2 business days, the insurer and repair shop shall be obligated to proceed in accordance with the regulations of the board regarding the assignment of an appraiser by the insurer. A licensed appraiser shall inspect and or re-inspect damaged motor vehicles when an insured does not accept in full the requested new appraisal or supplemental allowance within 4 days of the initial electronic receipt by the insurer for the new appeal or supplemental allowance. Any appraisal written by a registered repair shop and submitted to an insurer shall be accompanied by a signed authorization by the vehicle owner or authorized representative to repair the vehicle as appraised and a direction to pay form authoring payment directly to the repair shop. Payment for all necessary repairs shall be remitted by the insurer to the repair shop within 5 business days following the completion of the necessary repairs or 5 business days following the re-inspection of the repairs, whichever action comes first, unless another mutually agreed upon payment process is in place between the insurer and the repair shop.
Any violations of this paragraph that constitute a pattern of behavior, as determined by the commissioner, shall constitute a violation of chapter 176D of the General Laws and shall be enforced by the commissioner. Failure to comply with the provisions of the above paragraph will result in a fine of not less than $300.00 or more than $500.00 for each incident cited in the determined patter of behavior, and shall be payable to the division of insurance by the insurer. A violation of the above paragraph shall be considered an unfair claims settlement practice in the business of insurance in addition to those practices set forth in section 9 of chapter 176D.
SECTION 4: Section 34O of chapter 90 of the General Laws, as so appearing, is hereby amended by striking out, in lines 191 to 198, the words “provided, however, that for at least seventy-five per cent of those claims where the appraisal indicates that the cost of repairs will exceed four thousand dollars and at least twenty-fiver per cent of those claims where the appraisal indicates that the cost of repairs will be four thousand dollars or less, a licensed auto damage appraiser shall re-inspect the vehicle following completion of repairs and shall certify on the claim form that the work has been completed in accordance with an appraisal made pursuant to said regulations” and inserting in place thereof the following words:— provided, however, that the commissioner may establish requirements for re-inspection by licensed damage appraisers during or following the completion of repairs. In cases where a completed work claim form is required, a licensed auto damage appraiser, which may include a repair shop appraiser, shall certify that the work has been completed in accordance with an appraisal or repair order.
SECTION 5: Said section 34O of said chapter 90, as so appearing, is hereby amended by striking out, in line 203, the word “may” and inserting in place thereof the following word:— shall
SECTION 6: The 18th paragraph of said section 34O of said chapter 90, as so appearing, is hereby amended by striking out clause (a) and inserting in place thereof the following clause:—
(a) The insurer must disclose that they also guarantee the work of all shops licensed and registered to do business here in the commonwealth. No insurer shall use or calculate a less favorable labor rate for a repair shop based upon a shop not being a participant of a direct payment plan authorized by this section and by section 113O of chapter 175 or not being a participant in an expedited repair process authorized by section 8G of chapter 26.
SECTION 7: The 18th paragraph of said section 34O of said chapter 90, as so appearing, is hereby amended by striking out clause (c) and inserting in place thereof the following clause:—
(c) No insurer or appraiser shall require, suggest, request, or recommend that any appraisals or repairs should or should not be made in a specified registered repair facility or facilities authorized under section 34O of chapter 90 or otherwise, nor shall an insurer or appraiser use coercion or intimidation to cause appraisals or repairs to be made or not made, in any specified repair facility or facilities, unless otherwise permitted by this section or by section 8G of chapter 26 and by section 113O of chapter 175. No insurer or appraiser shall inquire of the insured’s desired location of repair and repair shop facility. The insurer must disclose that they guarantee the work of all licensed and registered repair shops that do business in the commonwealth. Any violations of this paragraph that constitute a pattern of behavior, determined by the commissioner, shall constitute a violation of chapter 176D and shall be enforced by the commissioner.
SECTION 8: Said section 34O of said chapter 90, as so appearing, is hereby amended by inserting after the 18th paragraph the following paragraph:—
Failure to comply with the provisions of clauses (a) through (e) of this paragraph, which constitute a pattern of behavior, as determined by the commissioner, shall constitute a violation of chapter 176D of the General Laws and shall be enforced by the commissioner. Violations of the above provisions of the above clauses will result in a fine of not less than $300.00 or more than $500.00 for each incident cited in the determined patter of behavior, and shall be payable to the Division of Insurance by the insurer. A violation shall be considered an unfair claims settlement practice in the business of insurance in addition to those practices set forth in section 9 of chapter 176D.
SECTION 9: Section 2 of chapter 100A of the General Laws, as so appearing, is hereby amended by striking out, in line 17, the words “ten thousand” and inserting in place thereof the following figure:— 25,000
SECTION 10: Said section 2 of said chapter 100A, as so appearing, is hereby amending by inserting after the 7th sentence the following sentence:— Said application shall be further accompanied by proof in writing from a licensed insurance company registered in the Commonwealth of the motor vehicle repair shop’s workers’ compensation insurance, if applicable, and liability insurance.
SECTION 11: Said section 2 of said chapter 100A, as so appearing, is hereby further amended by inserting after 3rd paragraph the following 4 paragraphs:—
Any motor vehicle repair shop applying for a certificate of registration under the current chapter is required to have all local, state, and federal licenses and permits including a state sales tax identification number, a federal tax identification number, and a hazardous waste or environmental protection agency number. Every shop is required at all times to operate in accordance with the current environmental protection agency compliance regulations, current occupational safety and health administration regulations, and to comply with all state and local fire and electrical codes and must provide proof of compliance upon request.
Except for glass repair facilities and specialty repair facilities otherwise specifically exempted by the commissioner of insurance for good cause, every motor vehicle repair shop shall have, and as a condition for registration shall certify that it has: (1) a paint spray booth or room meeting the requirements of all applicable statutes, ordinances, and regulations promulgated by the commissioner; (2) high-volume, low-pressure paint spraying equipment, or its equivalent; (3) metal inert gas welding equipment, or its equivalent; (4) proper equipment and permits, or an identified contracted source having proper equipment and permits, for the evacuation of motor vehicle air-conditioning systems; (5) proper equipment, or an identified contracted source having proper equipment, for motor vehicle frame and unibody repair and measuring; and (6) proper equipment, or an identified contracted source having proper equipment, for performing motor vehicle wheel alignment.
The commissioner of insurance shall promulgate reasonable rules and regulations for the establishment of any additional minimum equipment standards required for every registered motor vehicle repair shop in the commonwealth.
The division of standards may inspect all registered repair facilities at their discretion to insure compliance with the aforementioned requirements. Failure to comply with any of the requirements will result in the forfeiture of the registration until such time as the division re-inspects the facility and determines the shop is in full compliance. No insurer or its agents may negotiate the repair of any vehicle with a shop that is unregistered or has its registration suspended nor with any unlicensed individual in a repair facility.
SECTION 12: Section 2A of said chapter 100A, as so appearing, is hereby amended by striking out, in line 3, the words “ten thousand” and inserting in place thereof the following figure:— 25,000
SECTION 13. Chapter 100A of the General Laws is hereby amended by adding the following section:—
100A:11 Auto glass replacement and/or repair or rental and replacement vehicle transactions and services; 3rd party billing limitations
Section 11. Notwithstanding any provisions of any general or special law to the contrary, no company which serves as a third party biller for a particular insurance company, whether a carrier or a producer, may additionally provide auto glass replacement and/or repair services or rental and replacement vehicle transactions and services for such insurance company. A third-party biller shall be defined as any company who processes, pays or monitors the payment of auto glass claims or rental and replacement vehicle transactions and services on behalf of an insurance carrier or insurance producer.
Such third-party biller shall not be related to any glass replacement, repair services or rental and replacement vehicle company in any way. This includes stock ownership or such ownership by any direct family relative.
Such third-party biller shall file with the Office of the Insurance Commissioner statements of ownership every year on a prescribed schedule, or upon any material change in ownership.
All third-party billers shall file with the Office of the Insurance Commissioner all contracts held with specific insurance companies, either carriers or producers, which delineate the provisions of the business relationship, excluding the amount of consideration provided for third-party billing services.
Each violation resulting in a failure to file either the statement of ownership and/or agreements between insurance companies and third-party billers shall result in a fine of $5,000.00 per incident. Judgment of such violation shall be at the sole discretion of the Commissioner of Insurance.
Each violation of the first paragraph of this section shall result in a fine of $1,000.00. Judgment of such violation shall be at the sole discretion of the Commissioner of Insurance. Furthermore, the Office of the Insurance Commissioner shall create and make available, forms for reporting such violations to said office.
SECTION 14. Chapter 100A of the General Laws is hereby amended by adding the following section:—
100A:12 Auto glass replacement and/or repair or rental and replacement vehicle transactions and services; restrictions
Section 12. Notwithstanding any provisions of any general or special law to the contrary, no insurance company, third party biller, agent or adjuster for such insurance company that issues or renews in the commonwealth any policy of insurance covering in whole or in part any motor vehicle may require that any person insured under said policy use a particular company or location for the providing of auto glass replacement and/or repair services or rental and replacement vehicle transactions and services or products insured in part by that policy.
No such insurance company, third party biller, agent or adjuster for such insurance company may engage in any act or practice of intimidation, coercion, threat or inducement for or against any such insured person to use a particular company or
location to provide such services or products nor shall such insurance company, producer or adjuster provide for, allow or facilitate telephonic claims information directly to preferred automobile glass repair shops or rental and replacement vehicle companies.
The provisions of this section are applicable only to auto glass repair shops registered under the provisions of chapter 100A, and rental and replacement vehicle companies who will accept payments from insurance companies. Any violations of this chapter are subject to the provisions of chapter 93A.
SECTION 15: Section 113O of chapter 175 of the General Laws, as so appearing, is hereby amended by striking out, in lines 75 to 85, the words “provided, however, that for at least seventy-five per cent of those claims where the appraisal indicates that the cost of repairs will exceed four thousand dollars and at least twenty-fiver per cent of those claims where the appraisal indicates that the cost of repairs will be four thousand dollars or less, a licensed auto damage appraiser shall re-inspect the vehicle following completion of repairs and shall certify on the claim form that the work has been completed in accordance with an appraisal made pursuant to said regulations” and inserting in place thereof the following words:— provided, however, that the commissioner may establish requirements for re-inspection by licensed damage appraisers during or following the completion of repairs. In cases where a completed work claim form is required, a licensed auto damage appraiser, which may include a repair shop appraiser, shall certify that the work has been completed in accordance with an appraisal or repair order.
SECTION 16: The 4th paragraph of said section 113O of said chapter 175, as so appearing, is hereby amended by striking out clause (a) and inserting in place thereof the following clause:—
(a) The insurer must disclose that they also guarantee the work of all shops licensed and registered to do business here in the commonwealth. No insurer shall use or calculate a less favorable labor rate for a repair shop based upon a shop not being a participant of a direct payment plan authorized by this section and by section 34O of chapter 90 or not being a participant in an expedited repair process authorized by section 8G of chapter 26.
SECTION 17: The 4th paragraph of said section 113O of said chapter 175, as so appearing, is hereby further amended by striking out clause (c) and inserting in place thereof the following clause:—
(c) that no insurer or appraiser shall require, suggest, request, or recommend that any appraisals or repairs should or should not be made in a specified registered repair facility or facilities authorized under section 34O of chapter 90 or otherwise, nor shall an insurer or appraiser use coercion or intimidation to cause appraisals or repairs to be made or not made, in any specified repair facility or facilities, unless otherwise permitted by this section or by section or section 8G of chapter 26 and by section 34O of chapter 90. No insurer or appraiser shall inquire of the insured’s desired location of repair and repair shop facility. The insurer must disclose that they guarantee the work of all licensed and registered repair shops that do business in the commonwealth. Any violations of this paragraph that constitute a pattern of behavior, determined by the commissioner, shall constitute a violation of chapter 176D and shall be enforced by the commissioner.
SECTION 18: Said section 113O of said chapter 175, as so appearing, is hereby amended by inserting after the 4th paragraph the following paragraph:—
Failure to comply with the provisions of clauses (a) through (e) of this paragraph, which constitute a pattern of behavior, as determined by the commissioner, shall constitute a violation of chapter 176D of the General Laws and shall be enforced by the commissioner. Violations of the above provisions of the above clauses will result in a fine of not less than $300.00 or more than $500.00 for each incident cited in the determined patter of behavior, and shall be payable to the Division of Insurance by the insurer. A violation shall be considered an unfair claims settlement practice in the business of insurance in addition to those practices set forth in section 9 of chapter 176D
SECTION 19: The first paragraph of subdivision (9) of section 3 of chapter 176D, as so appearing, is hereby amended by inserting after clause (n) the following 2 clauses: —
(o) Requiring, suggesting, requesting, or recommending, in writing or verbally, directly or indirectly that any claimant or insured have any appraisals or repairs be made in, or not in, any specific repair shop, or lists of shops authorized under section 34O of chapter 90 or otherwise.
(p) The use of coercion or intimidation to cause appraisals or repairs to be made in, or not in, any specific repair shop, or lists of shops authorized under section 34O of chapter 90 and by section 113O of chapter 175.