California Auto Policyholder Regulation Limits Choice, Says

 

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26 February 2009 Thursday 04:02 PM EST

384 words


California Auto Policyholder Regulation Limits Choice, Says ACIC

Chad Hemenway

SACRAMENTO, Calif.



The insurance industry is attempting to stop a draft regulation in California that prevents insurers from recommending a repair shop car insurance after one is chosen by the applicant.

"This regulation would not help consumers," said Jeff Fuller, Vice President and General Counsel of the Association of Insurance Companies of California, in a statement. "(The settlement) could prevent consumers from being fully informed of all options available to their vehicles repaired after an accident."

ACIC testified against the regulation, which states: "The insurer shall not suggest or recommend that the applicant select another dealer auto repair, unless a reference is requested by the insured.

"Consumers must be fully informed in May to compare costs, quality and quality of work they have had their vehicles damaged," said Fuller. He added that the California law that consumers can choose a repair shop.

This is not the first time, the industry trade groups have opposed the practice in California. A year ago, the CICA, the American Insurance Association and the Insurance Federation voted against a bill to prevent insurers from steering policyholders to repair (BestWire, Feb. 26, 2008 ). Ultimately, the Governor vetoed the bill.

The industry comes to a anti-proposal management in Connecticut, which impose limits on insurers to offer guarantees on auto body repairs completed in shops recommended by the insurers (BestWire, the 18 February 2009).

In New York, the Insurance Commissioner Eric Dinallo recently found that insurers have not systematically oriented self insured some repair even if some did "engage in practices that could be considered violations ". New Yorkers also have the right to choose repair facilities following a claim.

In 2007, the top five writers of private passenger automobile insurance in California, based on AM Best Co. state / line data, were: State Farm Group, with 12.3% share market; Farmers Insurance Group, with 10.9%; Mercury General Group, with 9.8% Allstate Insurance Group, with 9.1%, and Auto Club Enterprises Insurance Group, with 8.9%.

(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway @ ambest.com)

27 February 2009

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