Proposed Model Act Regarding Auto Airbag Fraud

UPDATE … UPDATE … UPDATE … 25 Nov 2009

“I am proud of the efforts from those ‘back home’ in our industry,” said Schulenburg. “I had numerous representatives of the legislature serving on the NCOIL committee comment to me on how many calls and e-mails they received from SCRS members and collision repair facilities on Friday. It was very obvious that the direct communication from our industry to the legislators from the district level was impactful and effective in their votes on Saturday. Our industry’s voice was heard, and the concerns expressed certainly played a large role in improving the outcome.”

After much lobbying and discussion with the representatives, the opposing parties, including SCRS, supported an amendment offered by Kentucky Rep. Steve Riggs, which added that “any person who installs a salvaged airbag in a vehicle shall apply a permanent, durable label that clearly states that the vehicle contains a salvaged airbag. Such label must be permanently installed on the dashboard of the vehicle. Any person who removes such a label shall be guilty of a criminal offense.”

“We appreciate the support from Representative Riggs and all those who voted in favor of including this amendment in the model,” added SCRS Chairman Barry Dorn. “This one amendment reduces the negative impact we felt the bill had the potential to unleash, and ensures that any consumer who owns or enters the vehicle, now or in the future, is aware of the presence of salvaged airbags and can make informed decisions due to that very visible information.”

NCOIL has delayed action on the Model Act Regarding Motor Vehicle Crash Parts and Repair until its next meeting.

Urgent Message from Aaron Schulenburg
SCRS Executive Director

Reference:

NATIONAL CONFERENCE OF INSURANCE LEGISLATORS (NCOIL)
Proposed Model Act Regarding Auto Airbag Fraud

Affiliates and board,

Yesterday (Nov 18th 2009) in New Orleans I testified at an NCOIL hearing, opposing the proposed Airbag Fraud model (download PDF). I was joined in opposition by the Alliance of Auto Manufacturers, the Association of International Automobile Manufacturers, and Atty. Patrick McGuire speaking as advisory council for GM. Despite the delivery of compelling testimony from all parties on our side, there is a concern that we may still not have enough of the NCOIL P&C Committee’s votes to effectively kill this model legislation.

Download a list of the members of the committee (download list – PDF). In yellow you will see the committee members who are likely to be present for the vote on Saturday morning (21 Nov 2009), along with their contact information. We as an industry need you to reach out directly to any and all of the representatives from your state urging them to vote against this proposed model and to kill the proposal. It is imperative they hear from you today. The voice of a legislator’s constituent is very influential to them, and those that are on the fence will likely be swayed by and outcry from the voting public they represent.

Here are some facts, and potential speaking points:

• This bill was intended to provide consumer protection against fraudulent activity regarding the replacement of airbags. Despite the best of intentions, the bill has very negative ramifications and unintended consequences.
• This bill outlines the proper steps to take for both sellers and installers of salvaged airbags. The use of salvaged airbags is a huge concern of both liability and safety for collision repairers and the customers we serve.
• Outlining a process for the use of these parts seemingly legitimizes the practice and opens a gateway for insurers to potentially utilize these parts which cause us great concern for safety reasons.
• Groups within a lower economic background could be greatly impacted because if their policies start specifying the use of these parts they are put in a position to choose between the safety of their family and the cost to replace their deployed airbags with new OEM airbags which their policies would have previously covered. These groups may not have the financial ability to cover the out of pocket expenses and therefore, may be forced to compromise their safety by choosing parts that have not been unequivocally proven to be as safe.
• Currently in the U.S. insurance companies do not specify for the use of these parts, and they are not used by collision repairers specifically due to concern for safety and liability.
• If this bill passes, it lends credibility to the use of a part whose safety is rigorously debated, and therefore jeopardizes the safety of our customers.

Safety concerns for salvage airbags stem from:

• There is no certifiable evidence demonstrating that salvaged air bags will work properly in a real world crash.
• The precise history of salvaged airbags, is suspect at best.  Any number of factors can compromise the quality of an airbag after a vehicle is salvaged.
• Salvaged air bags are subject to exposure in uncontrolled salvage yard environmental conditions.
• Airbags may have been exposed to harmful environmental conditions such as flood damage, unknown heat or humidity prior to salvage.
• There are no trusted procedures for testing and inspecting salvaged airbags to validate the operability or structural integrity of the unit.

Recycled airbags may be mismatched and installed in a vehicle for which it was not designed

• Each airbag is designed to work as part of the overall occupant restraint system in the vehicle for which it was designed.
• Factors such as the design of the seating systems, seat belts, the angle of the windshield, shape of the steering wheel and dashboard, as well as other factors, are taken into account in the design performance of a particular airbag.
• Salvage airbags may not provide the same protection as the specific type of airbag that is designed for a particular vehicle, if not matched correctly.
• Repair facilities may not know the make/model, or of design changes within a make/model, of the vehicle from which a salvaged airbag was recovered.
• Different types of airbags deploy with different degrees of force depending on the sensing and diagnostic modules (SDMs).  Recycled airbags may not inflate with the correct level of force with disastrous results

Recycled airbags that are installed in a vehicle of the same make/model from which an airbag is salvaged could still pose a safety risk.

• Engineering technologies change over time and safety systems may not be the same from year to year.  Therefore, a salvaged airbag from one model year may not be a safe choice for the same make and model from a different model year.
• Only the factory can assure that the part supplied for a specific vehicle is the proper version for that vehicle.

A number of these individuals listed on the committee roster support our opposition and have equal concerns about the unintended consequences of this model. It will only help for all of these individual to receive contact from you today. Please take the time necessary and ensure that you reach out to the individuals; send emails, call them, leave voicemails if they do not answer. This vote is being held Saturday, Nov 21 2009 and they need to hear from us today, our industry needs to send a message.

Thank you for all that you do.

Aaron Schulenburg – aaron@scrs.com
SCRS Executive Director

GEICO Fined $30,000 by Minnesota Department of Commerce

Minnesota Commissioner of Commerce, Glenn Wilson, has issued a Consent Order to GEICO Insurance Company alleging that the company violated Minn. Stat. § 72A.201, subd. 6(2)(a) (2008).  GEICO was ordered to pay a civil penalty of $30,000 and to cease and desist from any further violations of the Statute.

The Order was issued based on allegations that GEICO paid an alleged “prevailing rate” to Minnesota body shops that was less than the total charged by the body shops for certain repair costs and this practice resulted in certain insureds or claimants paying claim amounts that should have been paid by the insurer.  The Order cited Minn. Stat. § 72A.201, subd. 6(2)(a) (2008), which requires insurers “…to pay all costs for the satisfactory repair to the insured’s or claimant’s vehicles.”  The Commissioner also ordered GEICO to contact insureds or claimants referenced in the Order and provide reimbursement for the amount they were required to pay out-of-pocket to body shops.   GEICO agreed to informal disposition of the matter without a hearing and accepted the terms of the Consent Order.

The Department took similar action against AIG in December of 2007.  In both cases, the investigations were advanced by unfair claims practice reports submitted by the Alliance of Automotive Service Providers, Minnesota (AASP-MN).  The Association encourages its members to document cases of improper insurance company practices on an ongoing basis and, in the case of short pays, urges its members to stop absorbing these costs and to inform their customers that they will be responsible for their insurance company’s failure to pay reasonable costs.

“We are very pleased by the Department’s action,” said Judell Anderson, AASP-MN Executive Director.  “This sends a strong message to all insurers that they must play by the rules or be held accountable.  It should also motivate repairers to be more proactive in their reporting and documentation of unfair insurer practices.  It’s not enough to just complain, shops have to take action,” Anderson added.

AASP-MN is an association of independently-owned automotive service businesses and industry suppliers dedicated to improving Minnesota’s automotive service industry and the success of its 630+ members.  For more information about AASP-MN, visit its website at www.aaspmn.org or call 612-623-1110.

Area Source Rule for Paint Stripping and Miscellaneous Surface Coating Operations

Updated Notification and Petition Forms

Below, please find the updated Rule 6H notification and petition forms for Georgia.  Now that implementation of this rule has been delegated to GA EPD’s Air Protection Branch, our previous forms have been updated to include BOTH the EPA Region 4 and GA EPD mailing addresses for submitting the forms. The new Rule specifically identifies the automotive collision repair and refinishing sector as being subject to the provisions of the Rule. It is important that you understand the new Rule.

Presentation: Painter Training Module for Environmental Compliance with National Emissions Standards for Hazardous Air Pollutants: Area Source Rule for Paint Stripping and Miscellaneous Surface Coating Operations.
Download the full presentation – click here (pdf 296 kb).

Brochure covering a summary of the rule requirements – download the brochure – click here (pdf 100 kb).

The notification form/instructions (shops that existed on or before Sept 2007 must send in the Initial Notification by January 2010, and be in full compliance with the rule by January 2011). Download the Notification Form – click here (pdf 75 kb).

Download the Instruction Form – click here (pdf 60 kb).

Petition for Exemption – download – click here (pdf 67 kb).

If you need assistance with the “Paint Rule” or other issues, don’t hesitate to contact the SBEAP office at 404-362-4842 or Toll Free at 877-427-6255 or visit their website at http://www.gasmallbiz.org/.

GCIA Thanks our November Meeting Lunch Sponsor

The GCIA wishes to thank Scott Saal of Auto Data Labels for sponsoring lunch at the November GCIA meeting on Thursday the 19th. It is support like this from our company members that makes the GCIA a strong association.

Learn more about Auto Data Labels – visit them online at www.autodatalabels.com.  Auto Date Labels manufacturers Replacement Safety Certification Information Labels and Tire Pressure Place Cards. All shops need to do is take a picture of the VIN label and email it in and Auto Data Labels mails the VIN label to factory specs within 3 days.  Shops also receive a complimentary I-CAR coupon with every 8th label purchased.  If you need any other info, you can contact Scott at 631-831-7427 or email to autodata10@aol.com.

13th Annual GCIA Golf Tournament Winners

After several postponements due to heavy rains and floods in the Atlanta metro area in the fall, the GCIA finally held its 13th Annual Golf Tournament on November 12th at The Frog at the Georgian Golf Course in Villa Rica, Georgia.  It was a four man “Best Ball” Tournament.  The turnout was terrific.

A BIG THANK YOU to all our GCIA members and Georgia Collision Industry professionals who turned out for this great event to help raise funds for the GCIA and charity. We had beautiful fall weather and everyone had a great day of fun and fellowship.

Below are the winning teams from the 2010 Tournament.

1st Place – European Collision Repair: Tommy Suggs, Andrew Suggs, Matt Lawson & Mike Shelton

2nd Place – ABRA/Weaver Parts: Louie Wilson,, Peterson Santos, Jeremy Lenox & Del King

3rd Place – Capital Cadillac: Mike Fraker, Brian Coleman, Dan Roberts & Steve Stanfill

GCIA November Meeting Recap

Planning Session for 2010

Prior to the November GCIA meeting, we teamed up with the Georgia Small Business Environmental Assistance Program to assist shops in their efforts to comply with the new rule passed by the U.S. Environmental Protection Agency (EPA). The painter certification class went very well. We had 28 people take a two hour training course for compliance with the new Area Source Rule for Paint Stripping and Miscellaneous Surface Coating Operations.

The course offered painters a background on Federal Air Emissions Regulations as well as details on compliance with the new rule (40 CFR 63, Subpart HHHHHH). Along with the painter training, shops were offered the opportunity to fill out the initial notification paperwork required to be submitted to the EPA by January 10 in order to be in compliance with the new paint rule. The GCIA plans to hosts several more of the certification classes in 2010.

At the 2010 Planning Session Meeting, members approved funds for the 4th annual GCIA labor rate survey to be completed early 2010 and an Insurer Rating Survey much like the one completed in Kentucky.  We are going to move forward quickly with the insurer survey. The Insurer Rating Survey is online now and we urge all shops to complete and submit it before the end of the year.

Members also approved funds to host a two-day collision industry event. The event will include Toby Chess’s Extrication program for Emergency Personnel, a mini-trade show, EPA Certification, I-CAR classes and a waterborne seminar. Plans are to coordinate this event around the CIC meeting scheduled in April 2010 in Atlanta, Georgia.

Many thanks to Sports & Imports in Duluth, Georgia who hosted the training session and the meeting. We wish to thank all members who took the time from their busy schedules to attend this important meeting. Your participation and input is sincerely appreciated.

The GCIA Board of Directors

The Hartford Ordered to Pay Connecticut Repairers $15 Million

A Stamford Superior Court jury today awarded $15 million to a group of auto body repair firms after determining The Hartford Insurance Co. engaged in unfair business practices to suppress labor rates. The class action lawsuit, filed by the Auto Body Association of Connecticut (ABAC) and three of its members, alleged that the insurance company engaged in a pattern of unfair practices that violated Connecticut law.

The jury agreed that The Hartford artificially suppressed body shop labor rates by eliminating the use of independent appraisers and relying exclusively on its own automobile service representatives to perform appraisals so the company could control their content, including labor rates. The result: consumers did not get fair, independent appraisals of the damage to their automobiles, ABAC says

Read the full story – click here.

I-CAR to Host Round Table Discussion on Role-Specific Training Needs

I-CAR has announced that it will host a round table discussion about the ongoing work to organize industry training around role-specific career paths. I-CAR invites interested members of the collision repair inter-industry to participate in an open dialogue on Wednesday, December 9 at its Training Support Center in Hoffman Estates, Ill.

Over the past 18 months, I-CAR has taken a systematic approach to analyzing its current curriculum model and collaborating with the inter-industry to develop a more meaningful approach to training that encompasses role-specific needs and training that builds on a foundation over time. “Despite the extent of the collaboration to date, we are still working to get as much information from the industry as possible,” said Jeff Peevy, director of field operations.

I-CAR presented a concept version of a new curriculum model at the Collision Industry Conference (CIC) meeting held on November 3 in Las Vegas, Nev. “For the past two years, we have been engaged directly with the inter-industry to identify the training challenges it is facing, and how I-CAR can better support the industry’s efforts to address them,” said John Edelen, president and CEO of I-CAR. “We continue to be guided by the I-CAR Vision throughout this work: ‘that every person in the collision industry, current and future, has the necessary knowledge and skills relevant to their position to achieve a complete and safe repair.’”

Collision repair inter-industry professionals who would like to take part in the discussion can register on the I-CAR website at www.i-car.com/roundtable to attend the meeting which will take place from 10:00 a.m. until 3:00 p.m. There is no cost to attend and lunch will be served. Participant travel is at the participant’s expense.

GCIA Thanks Rick Palmer of ComputerLogic

GCIA Thanks Rick Palmer of ComputerLogic

At the September GCIA meeting we had Mike Anderson, collision industry management expert as our guest speaker. Mike’s presentation was entitled “Tools to Get Paid.” Earlier, Mike conducted an all day DuPont Smart Class seminar.

Unsolicited, Rick Palmer, CEO of Macon, Georgia based ComputerLogic, volunteered to make copies of Mike’s GCIA presentation and send a copy to everyone who attended the GCIA meeting as well as the DuPont Smart Class. Rick covered all expenses of CD duplication and mailing.

It is through member’s actions like this that make the GCIA association strong and ready to face the future by helping our members be better prepared. We sincerely thank Rick Palmer for what he did.

The GCIA Board

About ComputerLogic

ComputerLogic, Inc. is a developer of computer systems and business solutions for the automotive aftermarket. They created PMCLogic, a paint and materials calculator and management system. The system allows body shops to quickly create an accurate record of all materials used in the repair process.

To learn more, contact ComputerLogic, Inc., 4951 Forsyth Road, Macon, GA 31210, (478) 714-2700 or online at www.computerlogic.com.

New PPG Courses Earn Accreditation from AMI and I-CAR

New PPG Courses Earn Accreditation from AMI and I-CAR
From CollisionWeek ©2009.

PPG Automotive Refinish has announced that its new MVP training courses centered on developing people and organizations in collision repair have earned accreditation from I-CAR and the Automotive Management Institute (AMI).

According to PPG, the set of three interrelated MVP courses, Job Relations, Job Instruction and Job Methods, are designed to develop the skills of managers and team leaders in their effort to build teamwork and create a productive workforce.

I-CAR students are eligible to receive 3.5 Gold Class points for each of the three courses, with AMI students eligible to receive 28 Accredited Automotive Manager (AAM) credits each.

Intended for supervisors, team leaders, corporate trainers and anyone with leadership responsibilities at a collision repair center, the MVP Job Relations, Job Instruction and Job Methods courses are scheduled throughout the year at PPG Business Development Centers located throughout North America.

For more information call MVP Business Solutions at 866/237-8178, or e-mail MVPmailbox@ppg.com or Norm Angrove at angrove@ppg.com.