Auto Body Association of Connecticut Takes Fight to Capital.

September 24, 2004 by
Filed under: Uncategorized 

The Auto Body Association of Connecticut has had a busy month beginning in late August. On August 26, 2004, ABAC officers and directors were invited to the Capital building for a meeting with the Governor?s staff. The meeting was prompted by the letter ABAC sent to Jodie Rell just prior to her being sworn in after the embarrassing departure of John Rowland. That letter was printed in the last ABAC newsletter and explained Connecticut?s collision repair industry?s frustration with the Department of Insurance not acting on complaints against the insurance industry. Leveraging the scandal involving allegations of corruption in the Rowland administration, the ABAC letter charged that the Insurance Department ?appears to be a den of corruption,? citing favoritism toward the insurance industry by ex-insurance employees turned Insurance Department officials. We credit the Rell administration with a quick response and a willingness to understand the problem.

Present at the meeting were ABAC President Tom Bivona, past President Karl Maus, Vice President Mike Walsh, Director Bill Denya, Director Tony Catapano and myself, John Shortell. Also present was ABAC attorney Bruce Morris. ABAC members met with Philip Dukes, Rell?s Counsel for Policy, and Nicole Griffin, the Legislative Liaison.

The meeting lasted about an hour and got lively as ABAC members tried to help the Governor?s staff understand the frustration we all feel when trying to get Connecticut?s Insurance Department to act on valid complaints. Philip Dukes appeared to play devil?s advocate and tried to give us a taste of the arguments the insurance industry would use to defend themselves. He encouraged us to get together detailed documentation and evidence and forward it to his office. This frustrated ABAC members attending the meeting because they had brought thousands of pages of evidence.

Apparently it was too much information. Dukes asked that it be boiled down with only the best, most concrete evidence and forwarded to his office as soon as possible. ABAC officers and directors are working on this task now.

When the meeting ended, most attendees walked away feeling they had wasted their time. They felt they were getting the brush-off. However, their attitudes changed when two weeks later they received a nice follow-up letter from Philip Dukes explaining what he needed for documentation, and thanking us for meeting with him. We are hoping that the Governor?s administration is serious about helping consumers and collision repairers fight for justice and enforce the laws currently on the books.

Less than three weeks later, and as promised by Connecticut Attorney General Richard Blumenthal, he hosted a meeting with ABAC officers at his office in Hartford. He also invited the Connecticut Insurance Department. As you can imagine, this was a lively and interesting meeting. Attending were ABAC President Tom Bivona, Director Bill Denya, Director Tony Catapano and myself, John Shortell. Representing the Insurance Department were Raymond Claytor from the consumer affairs division, Kathleen Kiernan-Pagani the insurance company liaison and Mark Franklin the Insurance Department attorney. Representing the Attorney General?s office were Attorney General Richard Blumenthal, Assistant AG Justin Kronholm and Special Counsel to the AG Richard Kehoe.

AG Blumenthal got the meeting going but had to leave after about ten minutes. His assistants moderated from then on. The meeting lasted about two hours. I began the meeting with an opening statement laying out our concerns and complaints about the insurance industry?s unfair business practices and the Insurance Department?s lack of willingness to act on our complaints. Special Counsel Kehoe did a good job asking questions to both ABAC members and Insurance Department members to keep the dialog fluid and civil.

The three main topics discussed were illegal steering and market manipulation by the insurance industry, and perceived favoritism given to insurance companies by the Connecticut Department of Insurance. ABAC members gave detailed accounts of tactics used by insurers to steer customers to their direct repair facilities. It came as no surprise when Raymond Claytor of the Insurance Department defended the insurance industry by claiming he had visited several insurance companies and read their scripts used by claims handlers. After much discussion he did concede that it was possible that insurance company employees were not following the written scripts and were using unwritten scripts to coerce consumers into following their recommendations.

The Attorney General?s representatives took great interest in learning that the Hartford Insurance Company was bribing their customers with $100 off of their deductibles if they took their vehicles to the Hartford?s DRP shops. Again, the Insurance Department defended this practice by claiming the steering law, as written, was unclear about what insurers could and couldn?t do to entice customers with their DRP programs.

Also discussed was insurance company tactics at manipulating and controlling labor rates. ABAC members described, in detail, tactics used by insurance appraisers to skirt Connecticut appraiser?s regulations. Evidence was presented that proved insurance companies had predetermined guidelines, and had great influence over how appraisers wrote estimates. Members of the insurance department and AG?s office appeared startled when Bill Denya pulled out a three inch thick, three ringed binder full of insurance company estimating guidelines. Bill Denya saved this material for just the right moment, and it was a Mastercard moment?Priceless.

There was also surprise in the room when ABAC member Tony Catapano revealed that he was a former insurance appraiser and adjuster with much inside information about the way insurance companies manipulate labor rates.

Still again, the insurance department came to defense of the insurance industry by claiming the appraiser regulations were not clearly written and open to interpretation. The response from AG Special Counsel Richard Kehoe was something to the effect of ?Gee fella?s, your department is supposed to enforce these regulations, maybe you can interpret them for us!? ABAC members made it clear that they wanted appraiser?s held accountable as licensed appraisers.

ABAC President Tom Bivona began discussion about the Insurance Departments lack of action on consumer complaints against insurance companies, citing statistics showing that about 85% of all insurance complaints were found in favor of the insurer. This began a chorus of contempt from all three Insurance Department members present, who scolded ABAC members for calling their department corrupt. Insurance Department tempers and nostrils flared as they called our charges ?near libelous.? They kept stating that that kind of language was not helpful to the effort of working together. Apparently, the Connecticut Department of Insurance thought that our efforts to work with them over the past ten years were helpful to our cause. Yes, we have accomplished so much working together, haven?t we?

To demonstrate to the Attorney General?s people the Insurance Department?s usefulness, I handed out copies of two complaints handled by the Insurance Department last year. I explained how an appraiser was caught red-handed lying to a shop about what other shops accepted for labor rates in order to trick that shop into accepting a substandard rate. I walked them through the mind numbing process of filing a complaint with the Insurance Department, only to have them pass the complaint along to the insurance company without any investigation. I explained that all the Insurance Department did was shuffle paperwork between the two parties, how the paperwork was lost several times, how the case was shuffled between two different examiners, and how the whole process lasted months. I gave evidence showing, what I believed to be a concerted effort by the Insurance Department personnel to stonewall the complaint until the complainant finally gave up. Interestingly, Insurance Department members could not respond or comment on my charges.

The meeting ended after about two hours with a promise by the AG to meet again. All ABAC members who attended felt it was a great and productive meeting. We hope the folks from the Insurance Department felt the same way, but something tells me they didn?t. The Attorney General?s people asked ABAC members to gather some specific evidence and forward it to their office. They also requested that the Insurance Department define the appraiser regulations so the AG could determine whether laws were being broken, and/or should additional laws be written. Probably the most important term the AG wanted clarified was ?Reasonable and Customary.? Insurers are required to pay what is reasonable and customary for the industry in any given area. The AG?s office wants the Insurance Department to define what they mean by ?reasonable and customary,? and more importantly, how insurers arrive at that criteria. It is the ABAC?s position, and it also appeared to be the AG?s position, that a ?Reasonable and Customary? price is determined by what the average walk-in customer is willing to pay himself, not what the insurance companies can negotiate with individual shops. Since people readily pay 75% more than insurers are willing to pay for auto repairs, a favorable decision could have a profound effect on collision repairer?s bottom line. You can be sure the insurance industry has already mobilized their political influence to fight this.

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Comments

4 Comments on Auto Body Association of Connecticut Takes Fight to Capital.

  1. billinbigd on Fri, 24th Sep 2004 12:44 pm
  2. Kudos to you guys for your determined efforts to get your point across to the bureaucrats. If more of us in this industry were willing to fight for what is truely fair and just we would not be the collective dumbasses you rightly categorize your peers as. The time and effort that you have put into your fight is commendable.
    Most of us have been victims of the games insurers play and most of us have decided to remain victims. John, you are a right wing nut – but I respect the hell out of you and the rest of the ABAC group involved in this fight for what is right!!

  3. ANDY FOLEY on Mon, 27th Sep 2004 7:28 am
  4. IT IS ABOUT TIME. WE ALL KNEW THIS WAS GOING ON. BUT WHO HAS MORE MONEY THAN THE INS. INDUSTRY TO FIGHT THE CORUPTION? THANKS TO THE GUYS WHO ARE FIGHTING FOR OUR RIGHTS. I WROTE THE INS. BOARD BACK IN THE MID-LATE 90’S ABOUT THE BLACK MAIL OF EMPLOYEES BY
    INS.CO DRP REINSPECTORS. NOTHING WAS EVER DONE. NOW I KNOW WHY.

  5. D.P. on Mon, 27th Sep 2004 11:35 am
  6. GOOD LUCK! I’ll bet a dollar to a doughnut that they the AG shuffle things around again and do nothing you must remember the government forces people to purchase insurance from the various entities. Who do you realy think is going to truly curb the corruptive activitys of the insurance comanys??? Yea sure they will listen to your complaints however If any thing becomes of it to the point of laws being writen to protect the consumers, the Insurance comanys ban together donate the neccisary funds to have the language watered down to some ineffective hoopla that wouldnt hold a bank robber leaving fort knox with a semi load of gold accountable. & If they do impose a fine of any magnitude. they allow the insurance companys to raise their premiums to regain their loses any ways. the AG office here in mich. does the same exact thing as you have described. we have filed some well documented complaints only to have them go through a half a.. ill attempt of investigating the complaints. since they never contacted our shop to get our side of the story, you figure it out. our mother of michigan is full of lip service when it comes to dealing with insurance corruption. MONEY TALKS & B…S… WALKS AND THE INSURANCE COMPANYS HAVE MORE THAN ENOUGH OF BOTH TO ACCOMPISH WHAT THEY NEED TO SWAY LEGISLATURE. ALL YOU HAVE IS ALOT OF SHOPS BACKING YOU WITH NO MONEY TO BUY THE RIGHT PEOPLE.
    ANY WAYS GOOD LUCK AND KEEP UP THE GOOD FIGHT!

  7. Joe S. on Tue, 28th Sep 2004 12:09 pm
  8. I work in the insurance industry and agree with the ABAC. I feel you guys are underpaid for the service that you provide. However there are problems with paying higher labor rates. If shops begin to get paid $60/hr which I agree would be fair compared to others in the automotive industry, nearly all cars will be considered total losses because of the high repair cost. The increase in paid severity would then be passed on the consumer by means of higher premiums. In my opinion, its a losing battle no matter how you look at it. The other issue with labor rate, is that it will never change if it is the ABAC members only arguing this point. You need to get everyone on board. If the joe/shmoe body shops down the road accept 44/hr all the time to keep a steady work flow, it makes it that much harder for you to demand a higher rate. I know a lot of your shops….I don’t argue your work product….but bottom line is that there are other shops out there charging less and giving the same quality. As a consumer, I would want to go to a shop that does quality work but doesn’t charge and arm and a leg. The company I work for has DRP shops but we don’t steer customers to them. In fact we have no goals based on referral percentages. DRP shops are designed for the customer who has no idea on where to get there car fixed. Hopefully, you guys get want you want…lord knows it will make the lives of appraisers much easier, but I worry about the bigger picture here.

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