Legislators Adopt Aftermarket Crash Parts Resolution

November 22, 2005

Concluding a 10-year debate regarding aftermarket crash parts, the National Conference of Insurance Legislators (NCOIL) unanimously adopted at its Annual Meeting in San Diego last weekend a Resolution Regarding Motor Vehicle Crash Parts. The resolution replaces further consideration of a proposed Certified Aftermarket Crash Parts Model Act (substitute amendment).

Strongly endorsed by a range of interested parties, the resolution recognizes the importance of competition in the crash repair industry and supports 1) use of all kinds of crash parts when appropriate; 2) consumer awareness of the differences between types of crash parts, as well as notification regarding the kind of part for which an insurer will reimburse; and 3) having an insurer stand behind the part(s) it requires.

An NCOIL Aftermarket Crash Parts Subcommittee, formed following the July NCOIL Summer Meeting, officially recommended that the Property-Casualty Insurance Committee consider the resolution in place of the aftermarket model law.

The Subcommittee initially agreed to a series of amendments to the model but ultimately determined that they were unworkable and that a resolution would be more appropriate. The proposed model act would have, among other things, endorsed certification of aftermarket crash parts by third-party organizations, such as the Certified Automotive Parts Association (CAPA); required disclosure as to the use of certified aftermarket crash parts; deemed that certified parts are of “like kind and quality” to car-company parts; provided that a person leasing or financing a vehicle could not be penalized for using a certified part; and identified the Act’s purpose as creating a market incentive for the use of certified aftermarket crash parts.

In November 2002, legislators deferred further review of the draft until the 2005 Spring Meeting, citing a need to address other issues. The model, first examined in November 2001, represented one aspect of NCOIL’s ongoing aftermarket deliberations.

The P-C Committee unanimously adopted the Resolution Regarding Motor Vehicle Crash Parts on Nov. 17 and referred it to the Executive Committee, which unanimously adopted it on Nov. 19.

NCOIL is an organization of state legislators whose main area of public policy concern is insurance legislation and regulation. Many legislators active in NCOIL either chair or are members of the committee responsible for insurance legislation in their respective state houses across the country.

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