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:
- 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.
- 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
NOTE: This Bulletin is 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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