Second Regular Session H.B. 2197
COMMITTEE ON GOVERNMENT REFORM
SENATE AMENDMENTS TO H.B. 2197
(Reference to House engrossed bill)
Strike everything after the enacting clause and insert:
"Section 1. Section 20-463.01, Arizona Revised Statutes, is amended to read:
20-463.01. Unlawful practices; auto glass repair; policyholders; insurers
A. It is an unlawful practice for a person who sells or repairs auto glass to knowingly:
1. Submit a false claim to an insurer for auto glass repair or replacement or for related services:
(a) If the services were not provided.
(b) Showing work performed in a geographical area that in fact was not the location where the services were provided and that results in a higher payment than would otherwise be paid to the person by the policyholder's insurer.
(c) Not authorized in writing by the owner or lessee of the vehicle.
(d) Showing work performed on a date other than the date the work was actually performed and resulting in a change of insurance coverage status.
2. Advise a policyholder to falsify the date of damage to the auto glass that results in a change of insurance coverage for repair or replacement of the auto glass.
3. Falsely sign on behalf of a policyholder or another person a work order, insurance assignment form or other related form in order to submit a claim to an insurer for auto glass repair or replacement or for related services.
4. Misrepresent to a policyholder or other person:
(a) The price of the proposed repairs or replacement being billed to the policyholder's insurer.
(b) That the insurer has approved the repairs or replacement unless the auto glass repair or replacement facility has verified coverage or obtained authorization directly from the insurance company or any other third party administrator contracted with the insurance company and the evidence has been confirmed by fax, e‑mail or other written and recorded communication.
5. Represent to a policyholder or other person that the repair or replacement will be paid for entirely by the policyholder's insurer and at no cost to the policyholder unless the insurance coverage has been verified by a person who is employed by or is a producer contracted with the policyholder's insurer or is a third party administrator contracted with the insurer.
6. Add to the damage of auto glass before repair in order to increase the scope of repair or replacement or encourage a policyholder or other person to add to the damage of auto glass before repair.
7. Perform work clearly and substantially beyond the level of work necessary to repair or replace the auto glass to put the vehicle back into a safe pre‑damaged condition in accordance with accepted or approved reasonable and customary glass repair or replacement techniques.
B. It is unlawful for a person who sells or repairs auto glass to intentionally misrepresent the relationship of the glass repair facility to the policyholder's insurer. For the purposes of determining whether a person intended the misrepresentation, it may be presumed that the person intended the misrepresentation if the person was engaged in a regular and consistent pattern of misrepresentation.
C. It is unlawful for an insurer that provides auto glass repair coverage or a third party administrator that administers the auto glass repair coverage for that insurer to:
1. Require that auto glass repairs be made to the insured's vehicle in a particular place, by a particular auto glass repair facility or by a particular auto glass repair business.
2. Fail to notify the insured of the insured's right to choose any glass repair facility for the repair of a loss relating to motor vehicle glass as provided in section 20‑469.
D. It is unlawful for a third party administrator that administers auto glass coverage for an insurer to Fail to disclose to the insured that the third party administrator is acting on behalf of the insured's insurer.
C. E. A violation of this section is subject to enforcement under this article.
D. F. For the purposes of determining whether a defendant knew of any particular element of the prohibited activity, it may be presumed that the person had knowledge if the person was engaged in a regular and consistent pattern of the prohibited activity.
Sec. 2. Section 20-469, Arizona Revised Statutes, is amended to read:
20-469. Motor vehicle loss; choice of glass repair facility; provider list; compliance; definition
A. Unless otherwise prescribed by contract, a person in this state has the right to choose any glass repair facility for the repair of a loss relating to motor vehicle glass. If an insurer recommends or provides information about a glass repair facility, the insurer shall inform the person of this right at the same time as making the recommendation or providing the information.
B. Within ninety days after the effective date of this amendment to this section, a third party administrator of auto glass claims for an automobile insurer shall compile a list of all automobile glass repairers that work or are willing to work in a particular county or municipality and that indicate that they want to be included on the third party administrator's provider list for that county or municipality. The third party administrator shall use all reasonable means to ascertain automobile glass repairers in the county or municipality that want to be included on the provider list. The list compiled under this subsection is the third party administrator's provider list for that county or municipality. In compiling the provider list, the third party administrator shall:
1. accommodate the request for an automobile glass repairer to be included in the list subject to only a reasonable information transmittal process without charge or other consideration, such as a specific reduction in the allowed charge for the glass repair service provided, and the requirements of this section.
2. Include only providers that are properly licensed, hold a minimum of five hundred thousand dollars liability insurance, have posted a five thousand dollar bond with the department and hold a valid accreditation from a nationally recognized auto glass repair accreditation organization.
C. The provider list compiled pursuant to subsection B of this section shall list each auto glass repairer in alphabetical order and include a corresponding numerical designation. If an auto glass repair business has financial or ownership interests in multiple entities providing glass repair services in a county or municipality, only one of those entities may be included on the provider list for that county or municipality.
D. On receiving a communication from an insured, a third party administrator Shall immediately ascertain if the insured prefers a specific provider for the automobile glass repair services. If the insured:
1. Has a preferred provider for the auto glass repair services and the provider is included on the third party administrator's provider list, the third party administrator shall refer the claim to that provider and inform the insured that the insured may use that provider.
2. Has a preferred provider for the auto glass repair services and the provider is not on the third party administrator's provider list, the third party administrator shall ask the provider if it agrees to the insurer's allowable reimbursement rates for the required services. If the provider agrees to the insurer's allowable reimbursement rates for the required services, the third party administrator shall refer the claim to that provider and inform the insured. If the provider does not agree to the insurer's allowable reimbursement rates for the required services, the third party administrator may advise the insured about differences in costs for the required services, including a warning that work performed by providers who are not on the third party administrator's provider list may not be covered completely and that payment by the insurer may be limited to a REASONABLE RATE in accordance with the insured's automobile insurance policy. If the insured insists on using a provider that is not on the third party administrator's provider list, the insured shall be permitted to do so.
3. Does not prefer a specific provider, the third party administrator shall provide the insured with the names of three randomly selected providers on the provider list on a rotating basis with no preference given to any provider. The third party administrator is required to offer All providers on the list before any provider may be offered again.
4. Does not prefer a specific provider and there are not at least three auto glass repairers on the provider list for a particular county or municipality, the third party administrator shall provide the insured with all of the names on the list.
E. If an insurer or a third party administrator determines that a physical or telephonic appraisal or inspection is necessary before approving auto glass repair for an insured, the inspection or adjustment must be conducted by a licensed insurance adjuster who is not affiliated with an automotive glass repair provider. Decisions to adjust or inspect an auto glass claim shall be made without prejudice to a specific auto glass repair provider.
F. This section does not prevent a third party administrator from including on the provider list auto glass repairers in which the third party administrator has a financial or ownership interest if that auto glass repairer's name is provided to insureds only in the manner provided in this section.
G. An insurer or third party administrator may provide information about a claim to an auto glass repair provider only after the insured has selected the auto glass repairer to provide the glass repair services.
H. A third party administrator:
1. Shall refer questions relating to warranties or guarantees of an auto glass repairer whose name has been provided to an insured pursuant to this section to that auto glass repairer. A representative of a third party administrator may not speak on behalf of an auto glass repair business affiliated with the third party administrator.
2. May not make any representation of the workmanship or quality of service of any auto glass repairer on the provider list other than that the auto glass repairer is on the provider list and is licensed, bonded, insured and nationally certified. This paragraph applies to all auto glass repair businesses, including those affiliated with the third party administrator.
I. This section does not create a private right or cause of action to or on behalf of any person. This section provides solely an administrative remedy to the director for any violation of this section. A violation of this section is subject to enforcement under this article.
J. An automobile insurer is responsible for its third party administrator's compliance with this section.
K. For the purposes of this section, "third party administrator" means any person who provides administrative service or adjusts or settles claims in connection with automobile glass repair insurance coverage.
Sec. 3. Section 20-469.01, Arizona Revised Statutes, is amended to read:
20-469.01. Third party administrator; glass; violation; classification; definition
A. If a third party administrator recommends or provides information about a glass repair facility to a customer pursuant to section 20‑469, the third party administrator shall inform the person of the person's right prescribed in section 20-469 to choose any glass repair facility for the repair of the loss relating to motor vehicle glass at the same time as making the recommendation or providing the information. An independent adjuster or a third party administrator's automotive physical damage appraiser or claims inspector for automotive glass repair or replacement work in connection with an inspection limited to automotive glass repair or replacement shall not recommend any particular glass repair facility.
B. This section shall not apply to any employee or insurance producer of an insurer.
C. This section shall not create a private right of action.
D. A person who knowingly violates this section is guilty of a petty offense for a first violation and, notwithstanding section 13-802, shall pay a fine of one thousand five hundred dollars for a second violation within eighteen months after a prior violation of this section and three thousand dollars for any subsequent violation within eighteen months after a prior violation of this section.
E. For the purposes of determining whether a defendant acted knowingly, it may be presumed that the person had knowledge if the person was engaged in a regular and consistent pattern of the prohibited activity.
F. An automobile insurer is responsible for its third party administrator's compliance with this section.
F. G. For the purposes of this section "third party administrator" means any person who provides administrative service or adjusts or settles claims in connection with automobile glass repair insurance coverage."
Amend title to conform