An Act To Protect Consumers' Freedom of Choice in Auto Collision Repairs
Sec. 1. 24-A MRSA §2164-C, sub-§2, as enacted by PL 2005, c. 101, §1, is amended to read:
A domestic or foreign insurer or its agent or employee may not contract with any person to act as its agent for purposes of managing, handling or arranging repair or replacement of motor vehicles for collision damage when that person is compensated by payment of a portion of the difference between the list price of the product or services provided and the amount paid to the person providing repair and replacement service.
A domestic or foreign insurer or its agent or employee may not recommend the use of a particular motor vehicle repair service or network of repair services without informing the claimant that the claimant is under no obligation to use the recommended repair service or network of repair services.
A domestic or foreign insurer or its agent or employee may not engage in any act or practice of intimidation, coercion, threat, incentive or inducement for or against an insured or claimant to use a specified place of business for repair and replacement services. A consumer benefit included within a preferred vendor program is not an incentive or inducement under this subsection but may not be presented as an incentive or inducement to use a specified place of business for repair and replacement services.
Sec. 2. 24-A MRSA §2164-C, sub-§§3 to 5 are enacted to read:
"You have the legal right to choose a motor vehicle collision repair shop to fix your vehicle. Your policy will cover the reasonable costs of repairing your vehicle to its pre-accident condition no matter where you have repairs made. Have you selected a motor vehicle collision repair shop, or would you like a referral?"
The prearranged script or talking points must also include for an insured or claimant who requests a referral to a motor vehicle repair service:
"Would you like the list of motor vehicle repair services within 20 miles of your residence?"
If an insured or claimant has indicated that the insured or claimant has selected a motor vehicle repair service, the insurer must cease all efforts to influence the insured's or claimant's choice of repair service. If the insured or claimant requests a referral to a motor vehicle repair service, the insurer may only provide a list of all appropriate motor vehicle repair services within 20 miles of the residence of the insured or claimant.
In addition to the fines specified in paragraphs B to D, for a 2nd and subsequent violation of this section, the insurer shall provide to the superintendent proof that the insurer has taken action to prevent further violations of this section, including training of employees and other corrective measures.
Upon complaint or the Attorney General's own initiative, the Attorney General may enforce this section including seeking any administrative or civil remedy allowed by law. The Attorney General to enforce this section is not required to show that a violation of this section occurs with such frequency as to indicate a general business practice.
summary
This bill amends the provisions of law regarding insurers' initial communications with an insured or claimant filing a claim for collision damage to an automobile in the following ways.
1. It clarifies that an insurer may not intimidate, coerce, threaten or provide incentive or inducement to the insured or claimant to use any particular specified place of business to repair the automobile.
2. It requires an insurer to submit to and have approved by the Superintendent of Insurance the script or talking points the insurer requires to be read or told to an insured or claimant upon receiving the claim and to include in the script or talking points an advisory that the insured or claimant has the legal right to choose the motor vehicle repair service to fix the vehicle.
3. It makes a violation of the provisions of this bill and the other provisions regarding free competition in insurance for motor vehicle repairs an unfair trade practice and a civil violation with graduated fines from $1,000 for a first offense to $5,000, a requirement for the 2nd and subsequent offense that the insurer provide proof of corrective measures and, for a 4th or subsequent offense within a 12-month period, possible suspension or revocation of the insurer's certificate of authority.
4. It allows the Attorney General to enforce the provisions of this bill and the other provisions regarding free competition in insurance for motor vehicle repairs.