An Act Relative to the Fair Payment for Services (Labor Rate Bill)
House Bill 805/ Senate Bill 561
*please note other labor rate bills have been filed, but only the two listed above were filed by the association.*
Massachusetts has the lowest auto body labor rate in the nation. To address this discrepancy that reduces employment opportunities, this legislation requires insurers to set the hourly labor rate at the average of the hourly rates paid by insurers for motor vehicle damage repairs in the surrounding New England states: Connecticut, New York, New Hampshire, Rhode Island and Vermont. The insurer shall submit its calculation to the Division of Insurance every two years.
SECTION 1. Chapter 100A of the General Laws is hereby amended by inserting after section 14 the following section:-
Section 15. The minimum hourly labor rate that insurers pay on insured claims for repairs made by registered motor vehicle repair shops shall be the average of the hourly rates reported by the Mitchell Industry Trends Report, or successor publication, for motor vehicle damage repairs in Connecticut, New York, New Hampshire, Rhode Island and Vermont. If an insurer does not use the Mitchell Industry Trends Report or successor publication, the insurer shall use the average of the labor rate it pays in those states, whichever is greater. The insurer shall submit such calculation to the commissioner of the division of insurance every two years.
SECTION 2. Section 113B of chapter 175 of the General Laws, as appearing in the 2010 Official Edition, is hereby amended by inserting, after the word “commissioner” in line 14, the following:- ; provided, however, that collision repair hourly labor rates, established pursuant to section 15 of chapter 100A, shall not be included when considering programs to control costs and expenses under this section or section 113H.
SECTION 3. The commissioner of the division of insurance shall adopt regulations for the administration and enforcement of this section one within ninety days from enactment of this act.
An Act Relative to Warranties
Senate Bill 134
This legislation reinforces the fact that a warranty is a warranty. Most auto insurance policies require auto body shops to use “aftermarket” or “like, kind or quality” parts, despite that this action may void a motor vehicle’s warranty. Most consumers are unaware that use of an “aftermarket” part in a repair could violate the vehicle’s warranty. Of further concern, consumers should not be required to choose whether to have a repair covered by insurance or pay for the repair out-of-pocket to keep the vehicle’s warranty in place. Accordingly, this legislation prevents a motor vehicle dealer or registered repair shop from taking any action (i.e. repair) that will void the motor vehicle’s existing warranty.
SECTION 1. Section 9 of Chapter 93B of the general laws, as appearing in the 2014 Official Edition, is hereby amended by inserting the following subsection at the end thereof:-
“(k) Notwithstanding any general or special law to the contrary, no registered repair shop shall take an action that voids any motor vehicle warranty.”
An Act Relative to Protecting Consumers by Providing Notice
House Bill 857
Mass. Gen. Laws ch. 26, section8G provides that “[n]o appraiser or insurer shall request or suggest that repairs be made in a specified repair shop.”. Commonly known as the anti-steering law, this provision of law prevents insurers or appraisers from directing business to a repair shops is not well known by consumers. This legislation simply provides that consumers will be informed of this non-steering law at the time of the transaction begins and at the time the consumer receives his/her estimate. The legislation further informs consumers that replacement parts may void the original manufacturer warranty and that all shops must guarantee their work. Finally, the legislation simply increases the existing notice’s font size from 10 point to 12 point.
SECTION 1. Section 34R of Chapter 90 of the general laws, as appearing in the 2014 Official Edition, is hereby amended by striking subsection (b) and replacing it in its entirety with the following new subsection:-
“(b) Attached to any such estimate which identifies non-original manufacturer parts shall be the following notice and acknowledgment, printed in no less than twelve-point type:
The repair estimate is based in part on the use of replacement parts which are not made by the original manufacturer of the damaged parts in your vehicle. Warranties, if any, applicable to these replacement parts are provided by their manufacturer or supplier rather than the manufacturer of your vehicle. The use of parts not made by the original manufacturer may void existing warranties.
You have the right to have your vehicle repaired at any repair shop. Your insurer or appraiser shall not require that the repairs to your motor vehicle be made at any specific repair shop.”
SECTION 2. Section 113T of Chapter 175 of the general laws, as appearing in the 2014 Official Edition, is hereby amended, by inserting the following paragraph at the end thereof:-
“Notwithstanding any general or special law to the contrary, any insurer, employee or agent thereof, who provides participating repair shop programs or endorsements shall, at the time an insured contacts the insurer to report an incident requiring the repair of the insured’s motor vehicle, read aloud, or if contacted electronically, provide a written notice, the following disclosure to the insured at the outset of the initial interaction:
“Under Massachusetts law, you have the right to choose a registered repair shop of your choice. All registered repair shops must guarantee their repairs.”
An Act Relative to Providing Consumer Protection in the Licensing of Appraisers
House Bill 816
As currently configured, the Massachusetts Auto Damage Appraisers Licensing Board has neither a consumer protection advocate or a member of the general public whose express purpose is to represent consumers. Further, virtually every member of a Massachusetts licensing board has a term limit on his/her term. Accordingly, this legislation adds a representative of the Attorney General’s Office and a member of the general public to represent consumers on this licensing board. The addition of term limits, which not only brings it in line with every other licensing board, serves to ensure that there is a continuum of experience and perspective represented on this licensing board.
SECTION 1. Section 8G of chapter 26 of the general laws, as appearing in the 2012 Official Edition, is hereby amended by striking the first paragraph in its entirety and inserting the following new paragraph in place thereof:-
“There shall be in the division of insurance an auto damage appraiser licensing board, hereinafter called the board, consisting of seven persons. The governor shall appoint two members who shall be affiliated with the auto body repair industry and two members who shall be affiliated with insurance companies writing casualty insurance within the commonwealth. The attorney general shall appoint one representative of her office and shall appoint one additional person, unaffiliated with her office, an auto body shop or an insurance company, to represent consumers. The commissioner of insurance shall appoint one person who shall not be affiliated with either the auto body industry or the insurance industry and who shall be the chairman of the board. No member shall serve for more than 2 consecutive and complete 3-year terms. As the term of the office of a member expires, a successor shall be appointed in like manner for a term of 3 years. A vacancy on the board shall be filled within 60 days from the date of the vacancy.”
An Act Relative to the Licensure of Appraisers
Senate Bill 190
The Massachusetts Auto Damage Appraisers Licensing Board (ADALB) is a state board charged with the licensure of auto damage appraisers. The ADALB is a licensing board similar to any other professional licensing board. As a result, this Board should be under the Massachusetts Division of Professional Licensure, which currently serves as the infrastructure support and agency of record, for working with licensed professionals. The Massachusetts Division of Insurance licenses insurers, insurance plans and insurance producers. An appraiser is a licensed professional who is neither (a) insurance company; (b) an insurance plan nor (c) an insurance producer. The Massachusetts Division of Professional Licensure already supports over 30 professional licensing boards responsible for the licensing of over 300,000 professionals.
SECTION 1. Section 8G of chapter 26 of the general laws, as appearing in the 2012 Official Edition, is hereby amended, in the first paragraph, by striking the words “division of insurance” and inserting the following words in place thereof:- ”division of professional licensure”.
SECTION 2. Section 8G of chapter 26 of the general laws, as appearing in the 2012 Official Edition, is hereby amended, in the first paragraph, by striking the words “commissioner of insurance” and inserting the following words in place thereof:- ”director of the division of professional licensure”