The National Conference of Insurance Legislators gave a preliminary okay yesterday to a resolution approving insurers' use of independently produced auto parts for collision repairs.
Their action, expected to be made final shortly, ends a longstanding controversy that it endorsed the use of both original automakers' crash parts and so-called aftermarket parts.
The resolution also requires insurance companies to "stand behind" any part it requires as a condition of reimbursement used in the repair of an automobile.
For nearly a decade, state lawmakers have debated a model law certifying the Certified Automotive Parts Association as the arbiter of parts used in the repair of an automobile when they do not come from the Original Equipment Manufacturer and allowing the certification of other such organizations.
Automotive industry representatives argued for more restrictions on independently produced auto parts, but no action was taken.
The issue was spotlighted earlier in the decade when State Farm was hit with trial level judgment of hundreds of millions of dollars for failure to notify consumers of the use of independently produced crash parts for repairs that a jury found to be unsafe
Last summer, the lawmakers took up the issue of a model law once again but could not reach agreement.
Instead, they agreed to put the issue behind them with passage of a resolution stating the group endorses "the use of all kinds of crash parts when appropriate for motor vehicle repair."
Nebraska Sen. Pam Redfield, R-Omaha, chaired a subcommittee this fall that drafted the resolution and said it represents a fair compromise of the interests of the parties involved in the discussion.
It was noted that 31 states have already dealt with the issue by requiring consumer notification of the type of crash parts to be used by an auto repair shop.
The only serious issue debated yesterday was whether insurance companies should "guarantee" auto parts required for reimbursement or merely "stand behind" them.
Robert Zeman, senior vice president for the Property Casualty Insurers Association of America, said federal law prohibits anyone but the manufacturer from guaranteeing any product.
In the end, the lawmakers agreed that "stand behind" would be adequate language for the resolution and the states could sort it out later.
"Just remember that the force this resolution has is the force any resolution has–not much," said North Dakota Rep. George Keiser, R-Bismarck.
Full NCOIL approval is expected to come this afternoon at the executive committee meeting, Mr. Keiser said.
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