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BULLETIN
284
AUTOMOBILE INSURANCE
GLASS CLAIMS
The Bureau of Insurance continues to
receive complaints which relate to insurers' compliance with Title
24-A M.R.S.A. §2164-C " Free Competition". The statute
provides:
"An insurer, domestic or foreign
or its producer or employee, may not require, directly or indirectly,
that appraisals or repairs to motor vehicle glass be made or not be
made in a specified place of business.
A domestic or foreign insurer or its
agent or employee may not contract with any person to act as its agent
for purposes of managing, handling or arranging repair or replacement
of motor vehicle glass when that person is compensated by payment of a
portion of the difference between the list price of the product or
services provided and the amount paid to the person providing repair
and replacement service."
It has been brought to our attention
that insurers are retaining third parties to administer or manage
glass claims arising under their policies. Some of these firms have,
or are affiliated with firms or networks of firms who have retail
glass repair or replacement services of their own. Such affiliations
have given rise to two issues:
1. First, it is alleged that insured
persons, including insureds who have already selected facilities to
repair or replace auto glass, are either encouraged or recommended
to take their vehicles to the claims administrator's repair
facilities.
2. Second, it is alleged that some
auto glass claim administrators may be refusing to respond to auto
glass claim communications initiated by repair or replacement
facilities which have been selected by insureds to do the repairs in
accordance with their insurance policies.
Insurers are reminded that they are
ultimately responsible for the appropriate settlement and payment of
claims arising under policies of insurance, regardless of whether they
choose to process those claims directly or contract with third
parties. Insurers are advised that the Superintendent of Insurance
considers the alleged practices described in this Bulletin to be in
violation of Section 2164-C. Insurers are encouraged to closely
monitor the settlement practices of third parties retained to act on
their behalf with respect to glass claims.
This Bulletin should be read in
conjunction with Maine Insurance Bulletin 171, issued September 19,
1990. That Bulletin notes other practices which the Bureau considers
to be in violation of 24-A M.R.S.A. §2164-C.
DATED: 10/14/98
ALESSANDRO A. IUPPA
Superintendent of Insurance
Bulletin
171
Motor
vehicle glass claims
September 19, 1990
The Bureau of Insurance has been receiving an excessive number of
complaints relating to insurance company handling of motor vehicle
insurance glass claims in recent months.
Insurers are reminded that 24-A M.R.S.A. Section 2164-C prohibits
insurers from requiring, directly or indirectly, that appraisals or
repairs to motor vehicle glass should or should not be made in a
specified place of business.
It is the Bureau's position that the following specific practices fall
within the prohibition:
(1) The referral of insureds to specific repair shops or networks of
repair shops absent clear disclosure that the insured is entitled to
have his or her vehicle repaired by any facility; and (2) the
limiting of claims payments, regardless of where repairs are made, to
amounts which have been agreed to between an insurer and one or more
repair shops when the amount of those payments is less than insureds
could reasonably cause the repair to be performed absent the
agreement. It is the understanding of the Bureau that insurers may
enter into agreements with one or more repair shops for the
performance of repairs for its insureds on a discounted basis to the
extent that interests of those insureds who elect to have repairs made
at other repair shops are not adversely impacted and to the extent
that such agreements are not in violation of laws relating to
antitrust.
It is the position of the Bureau that, to the extent allowed by
policy, insurers may limit the amount of claim payments for motor
vehicle glass claims to the amount for which the insured can
reasonably cause the repair to be performed absent special
arrangements between an insurer or insurers and a glass repair shop or
network of glass repair shops.
Joseph A. Edwards
Superintendent of Insurance
NOTE: These Bulletins
are intended solely for information purposes. It is not intended to
set forth legal rights, duties, or privileges, nor is it intended to
provide legal advice. Readers are encouraged to consult applicable
statutes and rules and to contact the Property and Casualty Division
of the Bureau of Insurance at (207) 624-8475 if they need additional
information.
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