THE SENATE

S.C.R. NO.

94

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 
   


SENATE CONCURRENT

RESOLUTION

 

REQUESTING A STUDY ON a prohibition on iNSURER-OWNED REPAIR SHOPS.

 

WHEREAS, according to the Automotive Service Association (ASA), whose membership includes 12,000 car repair facilities, insurance companies began buying or investing in car repair businesses approximately three years ago; and

WHEREAS, for example, Allstate owns Sterling Auto Body Centers in at least fourteen states; and

WHEREAS, according to the ASA, there is a conflict of interest when insurers refer policyholders to repair facilities in which they have an interest and this practice may result in customers receiving bad service and inferior replacement parts; and

WHEREAS, the ASA reports that members of the auto repair industry have complained that they are pressured by the insurance companies that own them to keep their costs down or risk losing repair referrals; and

WHEREAS, in February, 2004, the CBS Evening News reported on the "grossly negligent" repair work performed by a repair shop in California that is part of a chain of shops owned by a group of insurance companies, and that the California Attorney General has accused the chain of cheating customers at locations across that state; and

WHEREAS, state insurer-owned repair shop initiatives have been adopted by Texas and North Carolina, and eight states, including Hawaii, have similar legislation pending; and

WHEREAS, in Hawaii, S.B. No. 2531 (2004), a measure pending in the Senate Committee on Consumer Protection and Housing, proposes to prohibit an insurer from owning or acquiring an interest in a repair facility; and

WHEREAS, the Legislature requires further information on the need for a law prohibiting insurer-owned repair shops before considering its adoption; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-Second Legislature of the State of Hawaii, Regular Session of 2004, the House of Representatives concurring, that the Legislative Reference Bureau is requested to conduct a study regarding the necessity for a law prohibiting insurer-owned repair shops in Hawaii; and

BE IT FURTHER RESOLVED that the Department of Commerce and Consumer Affairs is requested to cooperate with and provide any requested assistance or information to the Bureau in a timely manner; and

BE IT FURTHER RESOLVED that the Legislative Reference Bureau is requested to submit its findings and recommendations, including proposed legislation, to the Legislature no later than twenty days before the convening of the Regular Session of 2005; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Acting Director of the Legislative Reference Bureau and the Director of Commerce and Consumer Affairs.

 

 

 

OFFERED BY:

_____________________________

Report Title:

Insurer-Owned Repair Shop Prohibition; Study