House Bill 5072, restricting insurers from directing insureds to use specific glass repair shops, was signed into law by Connecticut Governor Daniel Malloy on June 4, 2013. Similar regulation is under consideration in Massachusetts.
House Bill 5072 prevents insurers or its representatives, including agents, adjusters or third-party claims administrators, from requiring insureds to use specific auto glass repair shops. The law requires insurers inform customers that they may choose their own licensed glass repair shop. If the insurance company or third-party claims administrator owns or is affiliated with the recommended auto glass repair shop, customers must be provided with the name of at least one additional local licensed glass repair shop.
The bill will go into effect on January 1, 2014. Opponents tried to persuade the Governor not to sign the bill. The bill’s opponents argue that it will increase the cost of insurance and diminish the quality of auto glass repair. They further argue that the bill will cost Connecticut jobs. In contrast, supporters maintain that the bill will give consumers more choice when it comes to auto glass repair, allow local auto glass repair shops to compete with larger chains and require third-party administrators to follow fair business practices.
In Massachusetts, the Division of Insurance recently proposed a new regulation, 211 CMR 135.00, prohibiting insurers, as well as producers, adjusters or third-party administrators, from steering or interfering with an insured’s choice of a glass repair shop. Once an insured selects an auto glass repair shop, an insurer, appraiser or third-party administrator may not require the glass repair to be made at a different repair shop without the knowledge and consent of the insured. The regulation specifically defines practices which interfere with an insured’s choice of a glass repair shop as unfair trade practices with penalties of up to $5,000 for each violation. The Division of Insurance has scheduled a hearing to provide interested persons an opportunity to offer comments regarding 211 CMR 135.00 on June 28, 2013.