Amendment ID: S2945-5

Amendment 5

Reforming Auto Body Labor Rates

Mr. Moore moves that the proposed new draft be amended by inserting after section __ the following sections:-

SECTION XX. Chapter 100A is hereby amended by adding after section 14 the following new section:-

Section 15. (a) Notwithstanding any general or special law to the contrary, the commissioner of insurance shall set a minimum hourly labor rate that insurers shall pay on insured claims for repairs made by registered motor vehicle repair shops, provided that said rate shall not be less than $67.00 per hour, and provided further said rate shall be subject to adjustment under subsection (b).

(b) Beginning January 1 following full implementation of the minimum rate in subsection (a), and each year thereafter, the minimum reimbursement rate shall be adjusted by the commissioner of insurance annually by the percentage change in the Consumer Price Index for All Urban Consumers (CPI-U), Northeast Region, Not Seasonally Adjusted, as published by the United States Bureau of Labor Statistics and certified by the auto body labor rate advisory board in subsection (c)

(c) There is hereby established an auto body labor rate advisory board. The advisory board shall consist of: 1 person appointed by the commissioner of insurance, who shall serve as co-chair; 1 person appointed by the attorney general, who shall serve as co-chair; 1 person appointed by the director of standards; 3 persons selected from the auto insurance industry by the Automobile Insurers Bureau of Massachusetts; 3 persons selected from the auto repair industry from different geographic regions of the commonwealth by the Alliance of Automotive Service Providers of Massachusetts, Inc.; 1 person selected by the Massachusetts State Automobile Dealers Association, Inc; 1 person selected by the Massachusetts Association of Insurance Agents, Inc.; and 3 persons to be appointed by the co-chairs, 1 of whom shall be from a consumer advocacy group, 1 of whom shall be from a group representing the business community and 1 of whom shall be an economist with expertise on the insurance industry.

The board shall meet not less than once annually and shall be responsible solely for reviewing the CPI-U data and certifying the annual adjustment to the minimum reimbursement rate to correspond to the CPI-U. Said certification shall be transmitted to the commissioner of insurance and said commissioner shall adjust the minimum reimbursement rate within 30 days of receipt of said certification.

(d) Notwithstanding any provision of this section or any general or special law to the contrary, the insurer reimbursement shall not less than the minimum rate established under this section, provided that nothing in this section shall prohibit reimbursement above the minimum rate based on vehicle type, repair complexity, materials, training, certifications, equipment, or geographic location, or any combination thereof.

(e) No insurer shall refuse to negotiate reimbursement, limit payment, or direct or influence an insured’s or claimant’s choice of repair facility on the basis that a lower reimbursement rate may be available from another repair facility.

(f) This section shall not be construed to establish, mandate, or regulate labor rates charged by motor vehicle repair facilities. This section governs insurer reimbursement obligations solely for the purpose of ensuring proper indemnification of insureds and claimants and shall not supersede existing consumer protection, anti-steering, or appraisal laws or regulations.

SECTION YY. Notwithstanding section XX, the commissioner of insurance shall set a minimum reimbursement rate shall be $58.00 per hour within 30 days of the effective date of this act, and provided that said commissioner shall increase said reimbursement rate to $67.00 per hour no later than twelve months thereafter, and including any applicable CPI-U adjustment accrued during the preceding twelve month period.