Calif. AB 1200 on Way to Governor with Amendments
September 14, 2009

California Assembly Bill 1200, which would amend the state's anti-steering law, recently passed the Senate with several amendments. The Assembly has now concurred on the most recent amendments and sent it to enrollment; once through enrollment, where it will be proofread and checked for accuracy, it is scheduled to go to Gov. Arnold Schwarzenegger for review (CLICK HERE for related story.)

The bill has undergone several amendments since it was first introduced. Originally, it would have added the following language to the state's insurance code:

"Nothing in this section restricts the ability of an insurer to explain benefits the insurer provides as part of the claims process."

However, this language has since been deleted from the current draft of the bill, and the following has been added:

This bill would authorize an insurer to provide a claimant with specific truthful and non-deceptive information regarding the services and benefits available to the claimant during the claims process pursuant to the policy, as specified.

The latest version of the bill, passed out of the Senate recently, removes the above text in blue, "pursuant to policy."

The bill had passed in the Senate with a close vote of 21-7 after three different readings.

In the Assembly's latest analysis of the revised bill, released last week, it notes that the recent Senate Amendments do the following:

  • "Allow insurers to provide claimants with specific truthful and nondeceptive information regarding the services and benefits available to claimaints during the claims process. This may include information about the repair warranties offered, the type of replacement parts to be used, the anticipated time to repair the damaged vehicle, and the quality of workmanship available to the claimant;"
  • "Require that the written disclosure statement provided by insurers to claimants, when an insurer orally recommends an automobile repair dealer, be in separate and freestanding document;" and
  • "Add a sentence to the disclosure statement … that would read: 'We recommend you contact any other automotive repair dealer you are considering to clarify any questions you may have regarding services and benefits.'"

The Assembly also notes in its final analysis that the California Department of Insurance also is working on steering regulations that will regulate when insurers can recommend a shop (CLICK HERE for related story).

Assemblywoman Mary Hayashi's office has issued a statement about the passage of the bill, saying it passed "despite the efforts of a misinformation campaign." Hayashi was the original sponsor of the bill.

"AB 1200 will enable each consumer to make a more informed choice when selecting an auto repair shop under an insurance claim," reads the statement from Hayashi. "It authorizes insurers to discuss services available in their claims process, including direct repair programs- an insurer's network of auto repair shops that can provide claimants with benefits such as warranties on repair work, guaranteed prices, and the anticipated time to repair the damaged vehicle. As afforded by California's anti-steering law, the consumer continues to have the right to choose any auto body shop they want or participate in the direct repair program."

Though opponents of the bill have argued that AB 1200 weakens the state's anti-steering law, Hayashi disagrees.

" … AB 1200 does not end California's anti-steering law, and such wording is nowhere to be found in the bill text," she says. " … AB 1200 stands on the belief that an informed consumer can make the best choice. AB 1200 will give consumers information about auto repair shops from a company they have entrusted to insure them in times of need. The bill strikes a fair balance between giving consumers a complete picture about their auto repair options, and respecting California's anti-steering law, maintaining the requirement that a claimant be informed in writing of the clear and unmistakable right to select his or her auto repair shop of choice."

CLICK HERE for full text of bill as passed by both houses and in the form in which it was sent to enrollment.

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