Insurance and Real Estate Committee

JOINT FAVORABLE REPORT

SPONSORS OF BILL:

Insurance and Real Estate Committee

REASONS FOR BILL:

This bill would prohibit insurance companies and third-party claims administrators, agents and adjusters working for insurers from scheduling an appointment for automotive glass work for an insured.

RESPONSE FROM ADMINISTRATION/AGENCY:

None Expressed

NATURE AND SOURCES OF SUPPORT:

Anthony Ferraiolo, President Auto Body Association of Ct testimony feels the law appears designed to help control insurer steering of automotive glass claims, which is currently out of control.

Insurers in the auto repair market have sought to engage in practices beyond traditional underwriting of risk. We see insurers exercising unparalleled control over appraisers, over the business of glass repair, and over auto body repair facilities (through direct repair programs and otherwise). When insurers call the shots on auto and glass repairs, consumers suffer the consequences.

Eric Dill, Whalley Glass Co testified that independent glass ships in CT can no longer equitably receive auto glass insurance claim work in this state. Third Party Administrators are the reason this market is quickly disappearing for independent glass shops. Safelite Solutions is the largest TPA. They are owned by Safelite Auto Glass/Belron which is the largest auto glass replacement chain in the United States.

This bill will greatly improve the business climate for the independent glass shops since there will be no automatic scheduling, just customer preference.

John Wisniewski, President CGDA, Payless Auto Glass expressed that this bill specifically prohibits insurance companies and the TPA's from scheduling for an insured and this is the essence of steering. To our knowledge this does not happen in any other industry.

TPA's should simply administer claims. We support this bill because it takes away the potential of turning the claims process into a sales pitch for the consumer to use one glass company over another.

Joseph Negro, National Glass and Mirror Company expressed in his testimony that independent auto glass ships such as mine must deal with third party administrators (TPAs) in order to gain auto glass jobs paid for by customers' insurance companies. This bill would change the procedure at the time a claim is reported. I believe this change would give insurance consumers a choice in determining which shop best fills their needs and would enable the independent ships in CT a change of getting some portion of the insurance work.

Nicole Maloid, Director of Operations, Plymouth Glass & Mirror testified that she has been with Plymouth Glass for almost 17 years and has watched the company grow and struggle both at the same time. The third-party administrator, Safelite Solutions who is financially affiliated with Safelite Auto Glass, represents several large insurance carriers on behalf of automotive glass claims. She explained in detail that when you call for a glass claim, you are immediately directed to Safelite Solutions which is unfair.

NATURE AND SOURCES OF OPPOSITION:

Property Casualty Insurers Association of American (PCI) believes this bill will make it more cumbersome for consumers in CT to have glass repairs made to their cars. Consumer satisfaction relative to glass repair is important to insurers because if a policyholder has a negative glass repair experience, it may impact badly on their overall impression of their auto insurance company.

They support the consumer's right to choose which glass shop handles their glass repairs. There is no reason to make the lives of busy Connecticut consumers more difficult by prohibiting glass repair appointments from being made, in accordance with the wishes of the consumers.

Also, recent case law suggests that the provisions of this bill may be constitutionally suspect and that it would not be beneficial to pass another law in this subject area which may raise constitutional issues which may only result in further litigation on this issue.

Eric George, President, Insurance Association of CT stated statistically, the most likely claim interaction between an automobile insurer and its insured is a glass claim. This bill would nonsensically infringe on an integral part of a normal business operation by preventing the insurer from assisting the insured in accessing the policy benefits paid for by the insured and it provides no benefit to consumers. H.B. 6869 is clearly anti-consumer in its effect, needlessly forcing another procedural step on summers, and will only lead to confusion and delay in the glass repairs process.

Scot Zajic, Vice President, Legislative Affairs, Safelite Group, Inc. spoke and stated this bill is bad for Ct consumers and it is unconstitutional. Safelite remains committed to protecting the interest of CT consumers and welcomes the opportunity to work with the Committee to assure that policyholders continue to have a positive vehicle glass claims experience.