2012 -- H 7685

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LC01261

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO INSURANCE - UNFAIR COMPETITION AND PRACTICES

     

     

     Introduced By: Representative Michael J. Marcello

     Date Introduced: February 16, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 27-29-4.4 of the General Laws in Chapter 27-29 entitled "Unfair

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Competition and Practices" is hereby repealed in its entirety.

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     27-29-4.4. Auto body repair labor rate surveys. -- (a) Every insurance carrier

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authorized to sell motor vehicle liability insurance in the state shall conduct an auto body repair

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labor rate survey, subject to and in accordance with the following provisions:

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      (1) When used in this section the following definitions shall apply:

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      (i) "Auto body labor rate survey" is an analysis of information gathered from auto body

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repair shops regarding the rates of labor that repair shops charge in a certain geographic area.

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      (ii) "Prevailing auto body labor rate" means the rate determined and set by an insurer as a

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result of conducting an auto body labor rate survey in a particular geographic area, and used by

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insurers as a basis for determining the cost to settle automobile property damage claims.

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      (iii) "Independent auto body repair facility" means any auto body repair facility that does

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not have a formal agreement and/or written contract with an insurer to provide auto body repair

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services to insureds and/or claimants.

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      (iv) "Direct repair program" means any methods through which an insurer refers,

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suggests, recommends a specific auto body repair facility, with whom the insurer has a formal

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agreement and/or contract to provide auto body repair services, to insureds and/or claimants.

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      (v) "Contract rate" means any labor rate to which an auto body repair facility and an

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insurer have agreed in a formal agreement and/or written contract.

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      (2) Each insurer must conduct an auto body labor rate survey, in writing, annually to

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determine a prevailing auto body labor rate for fully licensed auto body repair facilities.

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      (3) Insurers may not use an auto body labor rate survey, contract rates from auto body

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repair facilities with which it has a formal agreement or contract to provide auto body repair

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services to insureds and/or claimants, or rates from a repair facility holding a special use license.

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      (4) Each auto body labor rate survey shall include the following:

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      (i) The name and address of each shop surveyed in the labor survey;

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      (ii) The total number of shops surveyed;

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      (iii) The prevailing rate established by the insurer; and

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      (iv) A description of the formula or method used to calculate or determine the specific

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prevailing rate reported.

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      (5) Each insurer must report the results of their auto body labor rate survey to the

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department of business regulation insurance division.

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      (6) The department of business regulation must promulgate regulations related to auto

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body labor rate surveys by October 1, 2006 establishing the following:

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      (i) A questionnaire that must be used by all insurers in their labor rate survey;

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      (ii) Date of reporting; and

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      (iii) Number or percentage of shops to be surveyed.

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      (7) The department of business regulation shall review all surveys submitted for

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compliance with this section and any rules and regulations promulgated by the department.

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     SECTION 2. This act shall take effect upon passage.

     

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LC01261

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE - UNFAIR COMPETITION AND PRACTICES

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     This act would eliminate the requirement of insurance carriers selling motor vehicle

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liability insurance in the state to conduct auto body repair labor rate surveys.

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     This act would take effect upon passage.

     

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LC01261

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H7685