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STATE OF RHODE ISLAND
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IN GENERAL ASSEMBLY
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JANUARY SESSION, A.D. 2012
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____________
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A N A C T
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RELATING TO INSURANCE - UNFAIR COMPETITION AND PRACTICES
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Introduced By: Representative Michael J. Marcello
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Date Introduced: February 16, 2012
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Referred To: House Corporations
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It is enacted by the General Assembly as follows:
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1-1
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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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1-2
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Competition and Practices" is hereby repealed in its entirety.
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1-3
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27-29-4.4. Auto body repair labor rate surveys. -- (a) Every insurance carrier
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1-4
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authorized to sell motor vehicle liability insurance in the state shall conduct an auto body repair
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1-5
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labor rate survey, subject to and in accordance with the following provisions:
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1-6
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(1) When used in this section the following definitions shall apply:
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1-7
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(i) "Auto body labor rate survey" is an analysis of information gathered from auto body
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1-8
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repair shops regarding the rates of labor that repair shops charge in a certain geographic area.
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1-9
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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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1-10
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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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1-11
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insurers as a basis for determining the cost to settle automobile property damage claims.
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1-12
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(iii) "Independent auto body repair facility" means any auto body repair facility that does
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1-13
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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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1-14
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services to insureds and/or claimants.
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1-15
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(iv) "Direct repair program" means any methods through which an insurer refers,
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1-16
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suggests, recommends a specific auto body repair facility, with whom the insurer has a formal
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1-17
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agreement and/or contract to provide auto body repair services, to insureds and/or claimants.
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1-18
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(v) "Contract rate" means any labor rate to which an auto body repair facility and an
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1-19
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insurer have agreed in a formal agreement and/or written contract.
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2-20
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(2) Each insurer must conduct an auto body labor rate survey, in writing, annually to
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2-21
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determine a prevailing auto body labor rate for fully licensed auto body repair facilities.
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2-22
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(3) Insurers may not use an auto body labor rate survey, contract rates from auto body
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2-23
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repair facilities with which it has a formal agreement or contract to provide auto body repair
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2-24
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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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2-25
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(4) Each auto body labor rate survey shall include the following:
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2-26
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(i) The name and address of each shop surveyed in the labor survey;
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2-27
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(ii) The total number of shops surveyed;
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2-28
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(iii) The prevailing rate established by the insurer; and
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2-29
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(iv) A description of the formula or method used to calculate or determine the specific
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2-30
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prevailing rate reported.
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2-31
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(5) Each insurer must report the results of their auto body labor rate survey to the
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2-32
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department of business regulation insurance division.
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2-33
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(6) The department of business regulation must promulgate regulations related to auto
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2-34
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body labor rate surveys by October 1, 2006 establishing the following:
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2-35
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(i) A questionnaire that must be used by all insurers in their labor rate survey;
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2-36
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(ii) Date of reporting; and
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2-37
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(iii) Number or percentage of shops to be surveyed.
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2-38
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(7) The department of business regulation shall review all surveys submitted for
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2-39
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compliance with this section and any rules and regulations promulgated by the department.
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2-40
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SECTION 2. This act shall take effect upon passage.
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LC01261
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=======
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EXPLANATION
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BY THE LEGISLATIVE COUNCIL
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OF
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A N A C T
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RELATING TO INSURANCE - UNFAIR COMPETITION AND PRACTICES
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***
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3-1
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This act would eliminate the requirement of insurance carriers selling motor vehicle
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3-2
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liability insurance in the state to conduct auto body repair labor rate surveys.
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3-3
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This act would take effect upon passage.
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=======
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LC01261
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=======
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