2012 -- H 7688

=======

LC01805

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

RELATING TO INSURANCE -- UNFAIR COMPETITION AND PRACTICES

     Introduced By: Representatives Ucci, Corvese, Winfield, Palumbo, and O`Neill

     Date Introduced: February 16, 2012

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 5-38-5 of the General Laws in Chapter 5-38 entitled "Automobile

1-2

Body Repair Shops" is hereby amended to read as follows:

1-3

     5-38-5. Rules and regulations. -- The auto collision repair licensing advisory board shall

1-4

with the director's approval:

1-5

      (1) Establish any rules, regulations, and procedures that it deems appropriate, and all

1-6

those rules, regulations, and procedures constitute a public record.

1-7

      (2) Establish standards for sanitary, hygienic, and healthful conditions of the work

1-8

premises and facilities used by persons licensed by the board.

1-9

      (3) Establish minimum requirements for the licenser of auto body repair shops.

1-10

      (4) Establish minimum requirements for the certification of auto repair technicians, other

1-11

than those whose work is limited to glass repair and/or replacement.

1-12

     (5) Establish three (3) classifications of full collision licensees based upon the amount

1-13

and type of equipment maintained and used by the auto body shop, the number of certified

1-14

technicians employed by the auto body shop, certification and compliance with environmental

1-15

agencies such as the EPA, and any other criteria the board believes necessary to classify auto

1-16

body shops.

1-17

     SECTION 2. Section 27-29-4.4 of the General Laws in Chapter 27-29 entitled "Unfair

1-18

Competition and Practices" is hereby amended to read as follows:

1-19

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

1-20

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

2-1

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

2-2

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

2-3

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

2-4

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

2-5

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

2-6

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

2-7

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

2-8

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

2-9

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

2-10

services to insureds and/or claimants.

2-11

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

2-12

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

2-13

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

2-14

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

2-15

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

2-16

      (2) Each insurer must conduct an auto body labor rate survey for each classification of

2-17

auto body shops as defined by the department of business regulation, in writing, annually to

2-18

determine a prevailing auto body labor rate for each classification of fully licensed auto body

2-19

repair facilities.

2-20

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

2-21

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

2-22

services to insureds and/or claimants, rates paid as a result of subrogation, or rates from a repair

2-23

facility holding a special use license.

2-24

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

2-25

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

2-26

      (ii) The total number of shops surveyed;

2-27

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

2-28

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

2-29

prevailing rate reported.

2-30

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

2-31

department of business regulation insurance division.

2-32

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

2-33

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

3-34

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

3-35

      (ii) Date of reporting; and

3-36

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

3-37

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

3-38

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

3-39

     SECTION 3. This act shall take effect upon passage.

=======

LC01805

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO INSURANCE -- UNFAIR COMPETITION AND PRACTICES

***

4-1

     This act would direct the establishment of three classifications for auto body shops.

4-2

     This act would take effect upon passage.

=======

LC01805

=======