2015 -- H 5491 SUBSTITUTE A

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LC001381/SUB A/2

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- AUTOMOBILE BODY REPAIR

SHOPS

     

     Introduced By: Representatives Corvese, Winfield, Carnevale, and Slater

     Date Introduced: February 12, 2015

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 5-38-5 of the General Laws in Chapter 5-38 entitled "Automobile

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Body Repair Shops" is hereby amended to read as follows:

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     5-38-5. Rules and regulations. -- The auto collision repair licensing advisory board shall

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with the director's approval:

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      (1) Establish any rules, regulations, and procedures that it deems appropriate, and all

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those rules, regulations, and procedures constitute a public record.

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      (2) Establish standards for sanitary, hygienic, and healthful conditions of the work

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premises and facilities used by persons licensed by the board.

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      (3) Establish minimum requirements for the licenser of auto body repair shops.

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      (4) Establish minimum requirements for the certification of auto repair technicians, other

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than those whose work is limited to glass repair and/or replacement.

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     (5) Establish two (2) classifications of full collision licensees based upon the following:

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     (i) Class A certification: To be eligible for Class A certification, a full collision licensed

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auto body repair facility must meet the following minimum requirements:

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     (A) Comply with all requirements for licensure promulgated by the department pursuant

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to subsections (1) through (4) of this section; and

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     (B) Be certified by at least one automobile manufacturer for the repair and refinishing of

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aluminum, high strength steel, and other metal or alloy; and

 

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     (C) Ensure customer satisfaction by providing each customer with a written limited

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lifetime warranty that is valid against workmanship defects, and maintain a system for

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documenting customer complaints and responses to service; and

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     (D) Provide evidence of certification of all technicians employed at the auto body repair

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facility by methods approved by the department regulations pursuant to subsection (4) of this

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section:

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     (ii) Class B Certification: To be eligible for Class B certification, a full collision licensed

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auto body repair facility must establish that it has met all of the requirements promulgated by the

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Department pursuant to subsections (1) through (4) of this section.

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     (iii) Class certification shall be issued to qualifying full collision licensed auto body

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repair facilities upon initial application for licensure and upon license renewal.

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     (iv) Notwithstanding subsection (iii) above, full collision licensed auto body repair

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facilities seeking Class A certification must apply to the department on or before December l,

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2015; all Class A applications must include documentation evidencing automobile manufacturer

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certification pursuant to § 5-38-5(5)(i)(B). Resulting classification designations (A or B) must be

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issued on or before February l, 2016, by the department. Any applicant requesting Class A

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certification must submit a three hundred dollar ($300) application fee.

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     (v) Any full collision licensed auto body repair facility that does not apply for

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certification on or before December 1, 2015, will be designated as a Class B full collision auto

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body repair facility.

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     (vi) After initial issuance of class designation by the department, pursuant to subsection

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(iv) of this section, a designated Class B auto body repair facility may apply for Class A

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certification at any time in a calendar year with an application fee of three hundred dollars ($300).

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The new classification, if any, resulting from a full collision licensed auto body repair facility's

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application received prior to December 31, of any calendar year must be updated on the

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department's listing of licensed auto body repair facilities for use by insurers in the auto body

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labor rate survey pursuant to § 27-29-4.4 of the next calendar year.

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     (vii) The auto collision repair licensing advisory board shall review the regulations

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promulgated under subsection (5) of this section at least every two (2) years. If new regulations

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are promulgated as a result of a review by the board, licensees must be given reasonable time to

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comply with any new requirements of class designations.

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     (viii) The department shall adopt such regulations necessary to carry out the provisions of

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this section on or before January 31, 2016.

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     SECTION 2. Section 27-29-4.4 of the General Laws in Chapter 27-29 entitled "Unfair

 

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Competition and Practices" is hereby amended to read as follows:

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     27-29-4.4. Auto body repair labor rate surveys. -- (a) Every insurance carrier

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authorized to sell motor vehicle liability insurance in the state shall conduct an auto body repair

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labor rate survey, subject to and in accordance with the following provisions:

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      (1) When used in this section the following definitions shall apply:

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      (i) "Auto body labor rate survey" is an analysis of information gathered from auto body

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repair shops regarding the rates of labor that repair shops charge in a certain geographic area.

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      (ii) "Prevailing auto body labor rate" means the rate determined and set by an insurer as a

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result of conducting an auto body labor rate survey in a particular geographic area, and used by

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insurers as a basis for determining the cost to settle automobile property damage claims.

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      (iii) "Independent auto body repair facility" means any auto body repair facility that does

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not have a formal agreement and/or written contract with an insurer to provide auto body repair

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services to insureds and/or claimants.

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      (iv) "Direct repair program" means any methods through which an insurer refers,

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suggests, recommends a specific auto body repair facility, with whom the insurer has a formal

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agreement and/or contract to provide auto body repair services, to insureds and/or claimants.

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      (v) "Contract rate" means any labor rate to which an auto body repair facility and an

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insurer have agreed in a formal agreement and/or written contract.

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      (2) Each insurer must conduct an a separate and distinct auto body labor rate survey, for

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each classification of auto body shops as established by the department of business regulation

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pursuant to § 5-38-5 in writing, annually to determine a separate and distinct prevailing auto body

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labor rate for each classification of fully licensed auto body repair facilities.

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      (3) Insurers may not use an auto body labor rate survey, contract rates from auto body

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repair facilities with which it has a formal agreement or contract to provide auto body repair

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services to insureds and/or claimants, rates paid as a result of subrogation, rates obtained from

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auto body repair facilities in a different classification than that being surveyed or rates from a

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repair facility holding a limited or special use license.

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      (4) Each auto body labor rate survey shall include the following:

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      (i) The name and address of each shop surveyed in the labor survey;

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      (ii) The total number of shops surveyed;

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      (iii) The prevailing rate established by the insurer for each classification of full collision

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licensed auto body repair facilities; and

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      (iv) A description of the formula or method used to calculate or determine the specific

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prevailing rate reported.

 

LC001381/SUB A/2 - Page 3 of 5

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      (5) Each insurer must report the results of their auto body labor rate survey to the

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department of business regulation insurance division.

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      (6) The department of business regulation must promulgate regulations related to auto

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body labor rate surveys by October 1, 2006 establishing the following:

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      (i) A questionnaire that must be used by all insurers in their labor rate survey;

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      (ii) Date of reporting; and

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      (iii) Number or percentage of shops to be surveyed.

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      (7) The department of business regulation shall review all surveys submitted for

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compliance with this section and any rules and regulations promulgated by the department.

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     (b) Nothing contained in § 27-29-4.4 shall require an insurer to establish the prevailing

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rate for each classification of full collision licensed auto body repair facilities based solely on the

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survey results.

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     SECTION 3. Section 1 of this act shall take effect upon passage. Section 2 of this act

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shall take effect on January 1, 2016.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO BUSINESSES AND PROFESSIONS -- AUTOMOBILE BODY REPAIR

SHOPS

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     This act would create two (2) classifications of full collision licensees for auto body

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repair facilities with the requirements for each. It would also clarify the auto body rate survey

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requirements.

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     Section 1 of this act would take effect upon passage. Section 2 of this act would take

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effect on January 1, 2016.

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