The Rhode Island Supreme Court will hear an appeal regarding whether auto insurers in the state must conduct a "labor rate survey," and use the results as the sole factor in determining prevailing auto body labor rates.
As reported on Aug, 15 by NU Online, the Rhode Island Superior Court ruled in Auto Body Association of Rhode Island (ABARI) vs. State of Rhode Island Department of Business Regulation (DBR) that the legislative intent of a 2006 statute was unambiguous when it stated, "Each insurer must conduct an auto body labor rate survey, in writing, annually to determine a prevailing auto body labor rate for fully licensed auto body repair facilities."
In developing a regulation on the statute, the DBR had said it did not interpret the legislative intent to mean that the survey should be used as the sole factor in determining and setting the prevailing auto body labor rate.
ABARI filed a petition with the DBR challenging the regulation, but the DBR said in its decision that "the clear legislative intent is to require insurers to consider information submitted by auto body shops on labor rates and to provide public information on how labor rates are set," rather than to use the survey as the sole factor in determining the auto body labor rate.
ABARI then appealed the department's decision to the Superior Court, which ruled in favor of ABARI.
The Property Casualty Insurers Association of America (PCI) said it intervened in the Superior Court case and made a filing asking the court to affirm the DBR's decision.
After the decision, PCI said, it and the DBR filed appeals to the Supreme Court, which consolidated the appeals and will now hear the case.
"PCI is pleased and encouraged that the Supreme Court agreed to hear the appeal," said Frank O'Brien, vice president and regional manager for PCI. "The previous ruling removed any checks and balances regarding the establishment of a reasonable labor rate, opening the door to drivers and insurers being socked with inflated auto body repair labor rates and ultimately higher repair costs."
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