National Insurance Group Testifies Against S. D. Aftermarket Parts Bill

January 26, 2007

The Indianpolis-based insurance trade group, The National Association of Mutual Insurance Companies (NAMIC) has urged South Dakota lawmakers to reject Senate Bill 48, a proposal to adopt consumer protection standards for property/casualty insurance claims. NAMIC believes the bill would actually result in higher premiums for consumers.

In testifying before the Senate Commerce Committee, Joe Thesing, NAMICs state affairs manager for the north central region said two provisions of the bill are especially troublesome; sections 28 and 29 relating to replacement crash parts — otherwise known as aftermarket crash parts.

“Current South Dakota law is very similar to the National Association of Insurance Commissioners’ model law on aftermarket crash parts in that it requires both disclosure of intended use and identification of the parts,” Thesing explained.

SB 48 would require insurers to offer to use new original equipment manufactured parts for certain new automobiles. NAMIC believes this is unnecessary and burdensome.

“It is NAMIC’s belief that such a requirement would cause delay in the claim settlement process and cause an increase in insurer claims expenses which would ultimately be passed along to policyholders through higher premiums,” Thesing said. “Increased regulation of aftermarket crash parts is not necessary or warranted. Further, the provisions of SB 48 addressing the use of these parts would suppress competition and create an inequitable field for commerce.”

Source: NAMIC

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