H.F. 2112 Section 1. NEW SECTION . 516B.4 Choice of automobile repair 1 facilities. 2 1. An insurer transacting business in this state, 3 including its producers and adjusters, that issues or renews an 4 automobile liability policy shall not do any of the following: 5 a. Require that a claimant under the policy use a particular 6 automobile repair business or location for an estimate or a 7 repair. 8 b. Engage in any act or practice that intimidates, coerces, 9 or threatens a claimant or that provides an incentive or 10 inducement for a claimant to use a particular automobile repair 11 business or location. 12 2. An insurer transacting business in this state, 13 including its producers and adjusters, that issues or renews 14 an automobile liability policy is entitled to have access 15 to a claimant’s automobile for the purpose of preparing a 16 competitive repair estimate. 17 3. If an insurer has a direct repair program with automobile 18 repair businesses or locations, the insurer shall not limit the 19 number of automobile repair businesses or locations with whom 20 it maintains a direct repair program except that an insurer may 21 limit the number of automobile repair businesses or locations 22 participating in the insurer’s direct repair program to 23 those automobile repair businesses or locations that meet the 24 requirements of subsection 4. An insurer is not required to 25 establish a direct repair program in a particular market area 26 where the insurer’s number of policyholders does not support 27 establishing a direct repair program in that area. 28 4. If an insurer has a direct repair program, the insurer, 29 upon request, shall provide to a claimant, without prejudice or 30 bias, a list of all automobile repair businesses or locations 31 that are reasonably close or convenient to the claimant 32 and willing to provide services and that meet the insurer’s 33 criteria for participation in its direct repair program by: 34 a. Possessing the equipment necessary to undertake repairs. 35 -1- LSB 5190YH (4) 83 av/nh 1/ 6

H.F. 2112 b. Undertaking training of management and technical 1 personnel with respect to repair information and the claims 2 process. 3 c. Agreeing to perform quality repairs at market price and 4 that meet industry quality repair standards. 5 d. Agreeing to warrant the quality of work including 6 refinishing, in writing, to the claimant or insured, for a 7 period of not less than one year from the date of repair. 8 e. Agreeing to inspection of their repairs and services by 9 the insurer and agreeing that the insurer may terminate the 10 direct repair program with the automobile repair business or 11 location if the repair and services provided are below the 12 standards of quality required by the automotive industry. 13 f. If requested, agreeing to execute an agreement with 14 the insurer that may contain additional criteria that are not 15 designed to unfairly limit the number of automobile repair 16 businesses or locations with whom the insurer maintains direct 17 repair programs. The additional criteria may include criteria 18 determined to be necessary by the insurer and designed to 19 ensure that the automobile repair business or location has 20 the necessary estimating systems and programs and equipment 21 to communicate electronically with the insurer and that the 22 automobile repair business or location has taken steps to 23 ensure the privacy of the insurer and the claimant. However, 24 the insurer shall not abrogate the right of an automobile 25 repair business or location to purchase parts or supplies from 26 any vendor, at the sole discretion of the automobile repair 27 business or location. 28 5. An insurer transacting business in this state, 29 including its producers and adjusters, that issues or renews 30 an automobile liability policy shall not abrogate the right of 31 a claimant to use any automobile repair business or location 32 at the claimant’s sole discretion, and the insurer shall pay 33 for the reasonable and necessary cost of the automobile repair 34 services for covered damages, less any deductible under the 35 -2- LSB 5190YH (4) 83 av/nh 2/ 6

H.F. 2112 terms of the policy. This section does not require an insurer 1 to pay more for automobile repair services than the market 2 price. 3 6. For the purposes of this section: 4 a. “Automobile repair business or location” does not include 5 a business or location that exclusively provides automobile 6 glass replacement, glass repair services, or glass products. 7 b. “Claimant” means a person seeking repair of an automobile 8 whether that person is the insured person or a third party 9 making a claim against the insurer. 10 c. (1) “Market price” means either of the following: 11 (a) The price agreed upon between the insurer and the 12 policyholder or the service provider. 13 (b) The price that is reasonable within the market of the 14 local area where the repair or replacement is being performed. 15 (2) The market price shall not be less than the cost of the 16 repair or replacement work to the service provider. 17 Sec. 2. NEW SECTION . 516B.5 Automobile glass repair —— 18 prohibited activities. 19 1. An insurer transacting business in this state, 20 including its producers and adjusters, that issues or renews 21 an automobile liability policy shall not, individually or with 22 others, directly or indirectly, do any of the following: 23 a. Establish an agreement with any person to act as a glass 24 broker for the insurer under which the glass broker sets a 25 price that must be met by a glass repair shop as a condition for 26 doing glass replacement or glass repair work for the insurer. 27 b. Establish an agreement with a glass broker that requires 28 a glass repair shop to bill through a glass broker as a 29 condition of doing glass replacement or glass repair work for 30 the insurer. 31 c. Establish a price that must be met by a glass repair 32 shop as a condition for doing glass replacement or glass repair 33 work for the insurer that is below the market price as defined 34 in section 516B.4. 35 -3- LSB 5190YH (4) 83 av/nh 3/ 6

H.F. 2112 d. Require that an insured under the policy use a particular 1 company or location for providing automobile glass replacement, 2 glass repair services, or glass products insured, in whole or 3 in part, under the terms of the policy. 4 e. Engage in any act or practice of intimidation, coercion, 5 or threat for or against an insured to use a particular company 6 or location to provide automobile glass replacement, glass 7 repair services, or glass products insured, in whole or in 8 part, under the terms of the policy. 9 2. An insurer shall not establish an agreement with a 10 glass broker that has any affiliation or relation to or with 11 manufacturing, distribution, wholesaling, or retailing of 12 automobile glass, including windshield repair resin and tool 13 manufacturers, distributors, wholesalers, and retailers. 14 3. This section does not require an insurer to pay more for 15 automobile glass replacement, glass repair services, or glass 16 products than the market price as defined in section 516B.4. 17 4. This section does not prohibit an insurer from agreeing 18 to pay the full cost of glass replacement or repair, less any 19 deductible under the terms of the policy. 20 5. As used in this section, “glass broker” means an 21 automobile glass company that acts as a third-party agent for 22 the insurer whenever the automobile glass company enters into 23 agreements with other automobile glass dealers to provide glass 24 replacement, glass repair services, or glass products for the 25 insurer. 26 EXPLANATION 27 This bill relates to choice of automobile repair and glass 28 repair facilities under automobile liability policies issued or 29 renewed in this state. 30 New Code section 516B.4 prohibits an automobile liability 31 insurer from requiring that a claimant under the policy use 32 a particular automobile repair business or location for an 33 estimate or repair. A claimant may use any automobile repair 34 business or location of the claimant’s choice and the insurer 35 -4- LSB 5190YH (4) 83 av/nh 4/ 6

H.F. 2112 must pay the reasonable and necessary cost of the repair 1 service for covered damages, less any deductible under the 2 terms of the policy. This section does not require an insurer 3 to pay more for repairs than the market price. 4 An insurer may have a direct repair program and provide to a 5 claimant, upon request, a list of participants in the direct 6 repair program that are reasonably close or convenient to the 7 claimant and that meet criteria, as specified in the bill, for 8 participation in the program. 9 An insurer is prohibited from infringing on the right of an 10 automobile repair business or location to purchase parts or 11 supplies from a vendor of its choice. 12 New Code section 516B.5 prohibits an automobile liability 13 insurer from establishing an agreement with any person to 14 act as a glass broker for the insurer under which the glass 15 broker sets a price that must be met by a glass repair shop 16 as a condition for doing glass repair or replacement work 17 for the insurer, that requires a glass repair shop to bill 18 through a glass broker as a condition of doing glass repair or 19 replacement work for the insurer, or that establishes a price 20 that must be met by a glass repair shop that is below the market 21 price as a condition of doing business with the insurer. An 22 insurer is prohibited from establishing an agreement with a 23 glass broker that has any affiliation or relation to or with 24 manufacturing, distribution, wholesaling, or retailing of 25 automobile glass, including windshield repair resin and tool 26 manufacturers, distributors, wholesalers, and retailers. 27 An automobile liability insurer is also prohibited from 28 requiring an insured to use a particular company or location 29 for providing automobile glass replacement, glass repair 30 services, or glass products pursuant to the policy. An insurer 31 is not required to pay more than the market price for such 32 services. 33 For the purposes of Code section 516B.5, a “glass broker” 34 means an automobile glass company that acts as a third-party 35 -5- LSB 5190YH (4) 83 av/nh 5/ 6

H.F. 2112 agent for an automobile liability insurer whenever the company 1 enters into agreements with other automobile glass dealers to 2 provide glass replacement or repair services or glass products 3 for the insurer. 4 For the purposes of the bill, “market price” means either the 5 price agreed upon between the insurer and the policyholder or 6 the service provider, or the price that is reasonable within 7 the market of the local area where the repair or replacement is 8 being performed. The market price cannot be less than the cost 9 of the repair or replacement to the service provider. 10 -6- LSB 5190YH (4) 83 av/nh 6/ 6