There are 80 members of the Assembly and 40 members in the State Senate.  These members are commonly known as legislators or lawmakers in the press. When a legislator “writes” a bill, he or she is known as the “author” of the bill. Any legislator may introduce a bill. Some bills are the product of the author, that is, the legislator is the source of the bill. When a special interest groups asks a legislator to author a bill, the bill is known as a “sponsored” bill, meaning the special interest group is identified as the source of the bill idea.

A bill must pass the Senate and the Assembly in the same form before it is sent to the Governor who may sign it into law, or veto it, or allow it to become law without a signature. 

American Honda announced in a March 22, 2010 press release that the company "does not support the use of...anything other than original Honda or Acura parts" for repair of their vehicle line.

In addition, American Honda does not support using or re-using parts from an existing, previously damaged vehicle.

Read the full press release by American Honda.

AB 1200 was passed by the Legislature and signed by the Governor. We were hoping for a different outcome however it is not the end of the world. The insurers presented this bill as a consumer protection matter necessary to allow consumers to make an informed choice regarding collision repairs covered under policies of insurance and in doing so it would be done in a specific truthful non deceptive manner. This is their language and we as an association are prepared to hold them to that standard.

As the insurers claim victory there is another aspect to this issue that is of benefit to the repair industry. In fulfilling their desire to direct customers they have in fact set a standard for steering that previously did not exist and if so inclined, the repair industry can now challenge them and hold them to the parameters of AB1200 to insure full disclosure to the customer.

AB 1200 provides that

CRA To ASK Gov. Schwarzenegger to “Terminate” AB 1200

The Assembly approved AB 1200(Hayashi) 42-19 on September 9, 2009. The bill now goes to the Governor for his consideration. The CRA will ask him to veto the measure because it will hurt the independent collision repair shops that already suffering during the economic downturn while depriving claimants the benefits of a repair analyses based on the right thing to do, not the cheapest way to go.

CRA president Lee Amaradio stated, “AB 1200 is a misleading proposal that allows an insurer to keep the details of DRPS secret while it badgers claimants into selecting a repair shop favored by the insurer.  We will ask the Governor to send AB 1200 back to the Legislature where it needs to be reworked into a measure that is fair to claimants, shops and insurers.

The CRA has posted the votes on AB 1200 so that members can see for themselves how their representative in the State Legislature responded to an insurance industry-backed bill.

The CRA’s lobbyist Richard Steffen wants to inform all members that State Assemblyman Dave Jones (D-Sacramento) has never voted for AB 1200, the insurance industry-backed steering bill. “AB 1200 was first approved by the State Assembly by a 78-0 vote on June 1, 2009. I reported in error that Assemblyman Jones had voted for this earlier version of the bill. Assemblyman Jones was, in fact, one of only two assemblymembers who did not vote for the measure. He has been and remains a champion of independent consumer choice in the repair of vehicles and I regret my oversight.

AB 1200 was amended in the State Senate where it won narrow approval last week. The bill is now in the State Assembly for a final vote that will occur this week.

Steffen added that members do not need to contact Assemblyman Jones on AB 1200 other than to thank him for his work on collision repair issues. “He understands the problems raised by the bill and continues to work to protect consumers,” noted Steffen.

The CRA continues to oppose the insurance industry’s AB 1200 which has been rewritten to do more damage to the state’s anti-steering law. The bill is slated to be heard Wednesday, July 1, 2009 by the Senate Banking, Finance and Insurance Committee at 1:30 p.m. in Room 112 of the State Capitol. At this late date members should email their opposition to the committee’s consultant: This e-mail address is being protected from spambots. You need JavaScript enabled to view it .
Attached below is the bill followed by the CRA’s latest letter of opposition.

BILL NUMBER: AB 1200 AMENDED
BILL TEXT

AMENDED IN SENATE JUNE 25, 2009
AMENDED IN ASSEMBLY APRIL 29, 2009

INTRODUCED BY Assembly Member Hayashi

FEBRUARY 27, 2009

An act to amend Section 758.5 of the Insurance Code, relating to
motor vehicle insurance.

LEGISLATIVE COUNSEL'S DIGEST

AB 1200, as amended, Hayashi. Motor vehicle insurance: direct
repair programs.

Existing law prohibits insurers from requiring that an automobile
be repaired at a specific automotive repair dealer. Under existing
law, an insurer may suggest or recommend a specific automotive repair
dealer under certain specified circumstances.

The California State Senate has unanimously approved AB 1179(Assemblyman Dave Jones), legislation requested by the CRA. The bill now goes to Governor Schwarzenegger for his consideration.  The proposed law would add to the “Consumer Bill of Rights” the right of a claimant to obtain an estimate of repairs independent of the insurer.

“One benefit to this bill is that the CRA was able to demonstrate to lawmakers  how some insurers try to convince the claimant to accept an insurer’s damage assessment as a settlement without obtaining a more accurate estimate of repairs from automotive repair dealer,” stated Allen Wood, CRA executive director.  “We are pleased that the State Legislature gave this measure its overwhelming support.”

CRA’s lobbyist Richard Steffen added, “The bill gave us an opportunity to work with Assemblyman Dave Jones who has proven to be a real consumer champion. We’re glad he’s a candidate to be California’s next insurance commissioner.”

Members  are urged to write Governor Schwarzenegger to ask him to sign AB 1179(Jones). Write the bill number, AB 1179, on the lower left hand corner of the envelope and address it to: The Honorable Arnold Schwarzenegger, Governor, State Capitol, Sacramento, CA 95814.

Below is the CRA’s opposition statement on AB 1200, an insurance industry sponsored bill that weakens California’s anti-steering law. Fax Your Letter of Opposition to AB 1200 TODAY to the Senate Banking, Finance and Insurance Committee at 916-327-7093.
_____________________________________________________________________________

June 22, 2009

The Honorable Ron Calderon, Chair
Senate Banking, Finance and Insurance Committee
Room 5066 State Capitol
Sacramento, CA 95814

RE: AB 1200(As Amended April 29, 2009), Oppose Unless Amended
Hearing Set for July 1, 2009

Dear Chairman Calderon:

The board of the Collision Repair Association of California (CRA) has voted to strongly oppose AB 1200 and to request the adoption amendments that would support consumer choice as now protected under existing law. Unfortunately, the bill as currently drafted endangers the consumer’s right to select an automotive repair dealer (ARD) when repairs are subject to coverage under a policy of insurance. 

First, state law and regulations protect consumer choice under Insurance Code Section 758.5.  Starting in October of 2007 the CRA’s lobbyist and other representatives of trade organizations, including the Personal Insurance Federation of California (PIFC), the sponsor of AB 1200, participated in meetings with Department of Insurance officials to clarify what an insurer may or may not say to a claimant who has selected an automotive repair dealer (ARD). The issue at hand concerns the actions of some insurers who attempt to direct or “steer” claimants that have a commercial business agreement with an insurer.

Steering is illegal in California. A few weeks before this bill was introduced, the Department of Insurance filed a show cause order against GEICO, alleging, in part, that the insurer had steered claimants to GEICO-favored shops even though the claimants had selected a shop.

Again, few days before AB 1200 was introduced, the Insurance Commissioner released proposed rules that would not allow an insurer to provide information about the insurer’s direct repair program if the claimant has already selected an ARD. Obviously, the insurers didn’t like the proposed rule, or the enforcement action involving GEICO. AB 1200 bill would undo the proposed rules and possibly affect negations between GEICO and the department over GEICO’s steering behavior.

During the steering discussions, Mr. Tony Cignerale, Deputy Insurance Commissioner, made it clear to the PIFC and others that Insurance Code Section 758.5 did not prevent an insurer from explaining provisions of the claimant’s insurance policy. In fact, the proposed rules state the following: “Nothing in this article restricts the ability of an insurer to explain contractural provisions of the insurance policy to the claimant…” The CRA hoped AB1200 would simply echo Mr. Cignerale’s comments. But AB 1200 is much too broad—it would allow an insurer to discuss “benefits” it could provide a claimant during the claims handling process. These so-called benefits could include the insurer’s direct repair program which insurers consider a benefit since a direct repair program is designed to cut corners on repairs and cost. Specifically, some ARDs (automotive repair dealers) have commercial business agreements with an insurer. Insurers will not allow ARDs to reveal the details of these commercial business agreements, but in some cases, the agreements provide benefits to the insurer, not to the claimant in terms of how a vehicle is repaired. So, AB 1200 would allow an insurer to extol on certain DRP benefits during the claim process without revealing all the aspects of a DRP agreement. In brief, if the claimant knew the full extent of  DRP conditions, her or she might reject the DRP scenario. A hidden “insurer benefit” might include the mandate on an ARD to use non-factory parts, including used parts from a salvage yard. For example, if an ARD fails to use enough aftermarket parts in the repair process, the insurer will drop the ARD from its referral list. Insurers issue quarterly “report cards” that track part usage at specific ARDs. The ARD is constantly under pressure to use the cheapest parts in a repair, even if the manufacturer recommends against the usage of aftermarket parts for matters of safety and maintaining the original warranty on the vehicle. Remember, the liability for the standard of repair falls on the ARD, not the insurer.

The CRA would remove its opposition to the bill if the reference to “benefits” were struck and replaced with language that emphasized that the insurer has the right to discuss policy provisions at any time during the claims process.

The CRA is an association of ARDs that ascribe to the highest standard of vehicle repair. It is the CRA’s hope that the committee will work to maintain the strong protections established through prior legislation by former State Senator Jackie Speier and to give Insurance Commissioner Poizner’s time to adopt the  proposed anti-steering rules and to “apply” them as an enforcement tool.

Should you have any questions about the information in this letter, please contact our legislative representative, Richard Steffen, at 916-524-8046.

Yours truly,

Allen Wood
Executive Director
cc. Members of the Sen. Banking Finance and Insurance Committee
      The Honorable Mary Hayashi
      The Honorable Steve Poizner
      Tony Cignerale

Breaking News from the Collision Repair Association of California
For Immediate Release: Monday, June 22, 2009
Contact: Richard Steffen , This e-mail address is being protected from spambots. You need JavaScript enabled to view it (916-524-8046); Allen Wood (916-837-2362)

CRA Calls Opposition to AB 1200 a “Defining Moment,” Sides with New Car Dealers in Fighting Insurance Bill

CRA president Lee Amaradio today called the association’s opposition to AB 1200 (Hayashi, D-Hayward) a “defining moment in the collision repair industry. “This short-sighted legislation, written by the Personal Insurance Federation of California, seeks to end the right of consumers to choose where their damaged vehicle is repaired,” said Amaradio. “In articulating our opposition, we have an opportunity to educate lawmakers on the harm caused by insurers that steer customers to their DRP shops. Conversely, if we fail, insurers will have a death lock on the process by which repair facilities are selected by vehicle owners.”

AB 1200 would allow an insurer to explain “the benefits” available to a claimant who has already selected a repair facility. California law states that once a claimant has selected a shop, the insurer shall not make any recommendations or suggestions that would prompt the claimant to switch to a shop preferred by the insurer. Under the scheme proposed by AB 1200, insurers could promote its DRP program to claimants at anytime during the repair process. Of course, the insurer wouldn’t have to reveal to the claimant how some DRP agreements restrict the use of factory parts and certain repair procedures recommend by the manufacturer.

Congresswoman Jackie Speier has requested that Insurance Commissioner Steve Poizner oppose AB 1200(Hayashi).

Read Congresswoman Speier's letter to Commissioner Poizner.

In this letter, Congresswoman Speier makes opposition to the bill very simple to understand:

The benefit of AB 1200 is obvious to most eyes: There is none. The truth is that it is a riddle wrapped in the enigma of insurance industry doublespeak. Please oppose AB 1200 and help to defend the right of consumers to exercise a free choice without feeling pressured after making that choice.

Congresswoman Speier sent this letter on April 10, 2009.