HOUSE . .
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. . No. 5053
The
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In the Year Two Thousand and Eight.
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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
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 appraiser or
employees of an independent appraisal company, insurance company or any of its
employees or representatives 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 appraiser or employees of an independent
appraisal company, insurance company or any of its employees or representatives
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 appraiser or employees of an independent appraisal
company, insurance company or any of its employees or representatives shall inquire
of the insured’s desired location of repair and repair shop facility. Any violations of this paragraph, determined
by the commissioner, shall constitute a violation of chapter 176D 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 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:—
The appraiser, representing the
insurer, shall be required to negotiate in good faith, using the manual the
supplement was prepared with. The repair shop may also require a completed
supplementary appraisal at the time the vehicle is viewed. If so
requested the repair shop must make available desk space, phone, calculator and
manual used to prepare the supplement. The repair shop may, at it’s
choosing, expedite the repair process by submitting a supplemental estimate
electronically that includes digital photos along with other supporting
documentation. Any such request must be reviewed by an appraiser duly
licensed under this section and must be approved or denied within 24 hours of
receipt. If the appraiser approves a supplemental request submitted in
this manner, the insurer shall not be required to assign an appraiser to
personally inspect the damage as required by 212 CMR 2.00. If the
appraiser does not approve a supplement request submitted in this manner they
shall state the reason in writing to the shop, and the claimant
or insured, and shall be obligated to proceed in accordance with 212 CMR 2.00,
and assign an appraiser who shall personally inspect the damaged vehicle within
three working days of the receipt of the original request. Failure to
comply with the provisions of this paragraph will result in a fine of
not less than $100 or more than $500 per incident and payable to the board by
the insurer. In addition, a violation of this paragraph shall be 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) that the insured or claimant will be given a
single list of all repair shops registered under chapter 100A of the General
Laws which are geographically convenient for the insured or claimant, which
shall be arranged in alphabetical order according to city or town, with no
highlights, asterisks, underlining, font size differences or phone number or
any other form of identification to indicate that any repair shop is a referral
shop or referral repair facility. Insurers shall also provide a written
disclosure, approved by the commissioner, to the insured of their rights and
shall not guarantee or warrantee the quality of repairs at any repair facility.
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 appraiser
or employees of an independent appraisal company, insurance company or any of
its employees or representatives, 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 appraiser or employees of an independent
appraisal company, insurance company or any of its employees or representatives
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 appraiser or employees of an independent appraisal company,
insurance company or any of its employees or representatives shall inquire of
the insured’s desired location of repair and repair shop facility. Any
violations of this paragraph 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, 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 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. The commissioner of the
division of insurance may promulgate rules and regulations for the
administration and enforcement of this act.
An insurance company, third party biller, agent or adjuster for such
insurance company violating this act shall be punishable by a fine of not less
than $300.00 nor more than $500.00 for each incident. 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) that the insured or claimant will be given a single
list of all repair shops registered under chapter 100A of the General Laws
which are geographically convenient for the insured or claimant, which shall be
arranged in alphabetical order according to city or town, with no highlights,
asterisks, underlining, font size differences or phone number or any other form
of identification to indicate that any repair shop is a referral shop or
referral repair facility. Insurers shall also provide a written disclosure,
approved by the commissioner, to the insured of their rights and shall not
guarantee or warrantee the quality of repairs at any repair facility.
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) no appraiser or employees of an independent appraisal
company, insurance company or any of its employees or representatives 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 appraiser or
employees of an independent appraisal company, insurance company or any of its
employees or representatives 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 appraiser or
employees of an independent appraisal company, insurance company or any of its
employees or representatives shall inquire of the insured’s desired location of
repair and repair shop facility. Any violations of this paragraph 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, 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 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.