2012 -- S 2661

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LC01807

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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: Senator Maryellen Goodwin

     Date Introduced: March 01, 2012

     Referred To: Senate Judiciary

It is enacted by the General Assembly as follows:

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

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

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

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with the director's approval:

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

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

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

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premises and facilities used by persons licensed by the board.

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

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

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

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

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

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

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

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body shops.

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

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

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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 for each classification of

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

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

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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, rates paid as a result of subrogation, or rates from a repair

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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 3. This act shall take effect upon passage.

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LC01807

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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 direct the establishment of three classifications for auto body shops.

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     This act would take effect upon passage.

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LC01807

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