HB 1117: Insurance; claims processing for repairs under motor vehicle liability insurance policies; provide

House Bill 1117

By: Representatives Franklin of the 160th, Smith of the 18th, Stephens of the 164th, Cheokas of the 151st, Gambill of the 15th, and others

A BILL TO BE ENTITLED

AN ACT

To amend Chapters 6 and 34 of Title 33 of the Official Code of Georgia Annotated, relating to unfair trade practices and motor vehicle accident reparations, respectively, so as to provide for claims processing for repairs under motor vehicle liability insurance policies; to provide for unfair claims settlement practices; to provide for the selection of a repair facility; to provide for payment for repairs; to provide for certain disclosures and notifications; to provide for original equipment manufacturer repair procedures; to provide for supplemental estimates; to provide for timely claims processing; to provide for written explanations; to provide for definitions; to provide for private causes of action; to provide for rules and regulations; to provide for related matters; to repeal conflicting laws; and for other purposes.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:

SECTION 1.

Chapter 6 of Title 33 of the Official Code of Georgia Annotated, relating to unfair trade practices, is amended by revising paragraphs (15) and (16) in Code Section 33-6-34, relating to unfair claims settlement practices, as follows:

"(15) Failure to comply with any insurer requirement in Chapter 20E of this title, the 'Surprise Billing Consumer Protection Act,' including:

(A) The failure to designate whether the healthcare plan is subject to the exclusive jurisdiction of the Employee Retirement Income Security Act of 1974, 29 U.S.C. Sec. 1001, et seq.;

(B) The failure to directly pay the provider or facility within 15 working days for electronic claims or 30 calendar days for paper claims any moneys due under Code Section 33-20E-4 or 33-20E-5; or

(C) The failure to pay a resolution organization as required under Code Section 33-20E-16; and

(16) Failure to comply with any insurer requirement relating to emergency services or care in Article 4 of Chapter 11 of Title 31, Article 1 of Chapter 20A of this title, Chapter 20E of this title, Chapter 21A of this title, Code Section 33-24-59.27, and Chapter 30 of this title; and

(17) Failure to comply with any insurer requirement relating to claims processing as provided under Code Sections 33-34-6, 33-34-10, and 33-34-11."

SECTION 2.

Chapter 34 of said title, relating to motor vehicle accident reparations, is amended by revising Code Section 33-34-6, relating to selection of motor vehicle repair facility, as follows:

"33-34-6.

(a) Subject to the provisions of subsection (b) of this Code section, no insurer shall represent to a person making a claim under a motor vehicle insurance policy that the use of or the failure to use a particular repair facility or particular repair facilities may result in the nonpayment of a claim.

(b) No insurer shall require a person making a claim under a motor vehicle insurance policy to use a particular repair facility or particular repair facilities in order to settle a claim if the person making the claim can obtain the repair work on the motor vehicle at the same cost from another source.

(a) As used in this Code section, the term:

(1) 'Claimant' means either a first-party claimant or insured or a third-party claimant who asserts a claim for payment, benefits, reimbursement, or damages under a motor vehicle liability insurance policy arising out of, based on, or in any way related to a motor vehicle collision, loss, ownership, maintenance, or use. Such term includes any assignee, subrogee, or legal representative of a first-party claimant or third-party claimant to the extent such assignee, subrogee, or legal representative asserts the claim.

(2) 'Financial interest' means any stake of monetary value, direct or indirect, in an entity. Such term includes any ownership interest, direct repair program, affiliation agreement, favored facility agreement, labor rate agreement, parts agreement, or service level agreement.

(3) 'Motor vehicle liability insurance' means motor vehicle insurance that covers the use of a motor vehicle and its operating equipment; covers liability, collision, comprehensive, personal injury protection or medical payments, or uninsured or underinsured motorist protection; or provides the mandatory minimum limits required under this chapter for the personal use of a private passenger automobile. Such term includes coverage provided through an approved plan or certificate of self-insurance to the extent recognized under state law as satisfying such minimum limits.

(b) All policies of motor vehicle liability insurance shall allow a claimant under such policy to select the repair facility to provide repairs covered under such policy. No insurer shall require a claimant under such policy to use a repair facility in which such insurer has a financial interest. No insurer shall represent to a claimant under such policy that the use of or the failure to use a particular repair facility or particular repair facilities may result in nonpayment or delayed or reduced payment of a claim or less quality or timeliness of repair under a claim. The amount determined to be payable under a motor vehicle liability insurance policy shall be paid regardless of the repair facility selected by a claimant.

(c) No insurer shall recommend the use of a particular repair facility without clearly informing a claimant under a motor vehicle liability insurance policy that:

(1) The claimant is under no obligation to use the recommended repair facility;

(2) The claimant may use a repair facility of the claimant's choice;

(3) The amount determined by the insurer to be payable under such policy will be paid regardless of whether or not the claimant uses the recommended repair facility; and

(4) Whether or not the insurer has a financial interest in the recommended repair facility. (d)(1) A violation of this Code section that occurs with such frequency as to constitute a general business practice shall be a violation of Article 2 of Chapter 6 of this title, the 'Unfair Claims Settlement Practices Act.'

(2) Any claimant aggrieved by a violation of the provisions of this Code section shall have a private cause of action for injunctive relief, treble damages, and any other relief available under law.

(e) The Commissioner shall promulgate rules and regulations necessary to implement this Code section."

SECTION 3.

Said chapter is further amended by adding new Code sections to read as follows:

"33-34-10.

(a) As used in this Code section, the term:

(1) 'Claimant' shall have the same meaning as set forth in Code Section 34-34-6.

(2) 'Motor vehicle liability insurance' shall have the same meaning as set forth in Code Section 34-34-6.

(3) 'Original equipment manufacturer repair procedure' means any written, electronic, or published repair standard, procedure, specification, or directive issued by a motor vehicle's original equipment manufacturer, including, but not limited to, body, frame, structural, mechanical, electronic, scanning, calibration, and refinishing operations.

(4) 'Repair facility' means a motor vehicle dealer, garage, body shop, or other commercial entity which undertakes the repair or replacement of parts of a motor vehicle.

(b) All policies of motor vehicle liability insurance shall provide for all repairs to be made in accordance with the applicable original equipment manufacturer repair procedures.

(c) No insurer that issues, delivers, issues for delivery, or renews a motor vehicle liability insurance policy shall require a claimant to deviate from or deny, omit, or disregard original equipment manufacturer repair procedures or to use nonoriginal equipment manufacturer parts, procedures, or specifications.

(d) An insurer that issues, delivers, issues for delivery, or renews a motor vehicle liability insurance policy shall:

(1) Approve any original equipment manufacturer repair procedure, including, but not limited to, any labor, materials, parts, calibrations, scanning, or sublet operations necessary to perform such procedure, that is documented in a written estimate or supplemental estimate from a repair facility or in a written request from a repair facility or claimant when the applicable original equipment manufacturer service publication, position statement, or procedure is identified; and

(2) Only deny reimbursement for a documented original equipment manufacturer repair procedure if, within three business days of receipt of the written estimate, supplemental estimate, or written request provided for in paragraph (1) of this subsection, such insurer provides to the claimant:

(A) A written itemized explanation for such denial, including, but not limited to, policy coverage limitations, prior payment, duplication, or unrelated to loss, specific to the original equipment manufacturer repair procedure; and

(B) Notice that such denial might constitute an unfair claims settlement practice under state law.

(e)(1) A violation of this Code section that occurs with such frequency as to constitute a general business practice shall be a violation of Article 2 of Chapter 6 of this title, the 'Unfair Claims Settlement Practices Act.'

(2) Any claimant aggrieved by a violation of the provisions of this Code section shall have a private cause of action for injunctive relief, treble damages, and any other relief available under law.

(f) The Commissioner shall promulgate rules and regulations necessary to implement this Code section.

33-34-11.

(a) As used in this Code section, the term:

(1) 'Appraiser' means any person evaluating motor vehicle damage and determining the cost of parts and labor required to repair such damage.

(2) 'Claimant' shall have the same meaning as set forth in Code Section 34-34-6.

(3) 'Motor vehicle liability insurance' shall have the same meaning as set forth in Code Section 34-34-6.

(4) 'Repair facility' means a motor vehicle dealer, garage, body shop, or other commercial entity which undertakes the repair or replacement of parts of a motor vehicle, including, but not limited to, frames, doors, bumpers, and paint.

(5) 'Supplemental damage' means additional physical damage to a motor vehicle that was not visible or reasonably ascertainable at the time of the original inspection or appraisal and is discovered after the initial insurance claim or estimated repair cost is filed.

(6) 'Supplemental estimate' means a written estimate for supplemental damage prepared by an appraiser.

(b) An insurer providing coverage under a motor vehicle insurance liability policy shall promptly acknowledge and investigate claims of supplemental damage submitted by a repair facility or claimant by meeting at least the following requirements:

(1) Within one business day of a notification of supplemental damage and supplemental estimate, the insurer shall assign an appraiser to inspect the damaged motor vehicle in person or review the supplemental estimate; and

(2) Within three business days of a notification of supplemental damage and supplemental estimate, the insurer shall complete an inspection of the damaged motor vehicle in person or review the supplemental estimate and provide a written response; provided, however, that the time for inspection or review may be extended for an additional three business days if unforeseen circumstances make inspection or review within three business days impracticable, provided that the insurer notifies the repair facility and claimant of the specific unforeseen circumstance that necessitates such extension.

(c) Within ten business days of receipt of a notification of supplemental damage and supplemental estimate, an insurer shall provide a repair facility and claimant with a written decision indicating the line items, parts, or operations that are approved and authorized for payment; those that are denied, reduced, or altered from the supplemental estimate; and a written explanation for such denial, reduction, or alteration, including, but not limited to, policy coverage limitations, prior payment, duplication, or unrelated to loss. No insurer shall issue payment or settlement for a supplemental estimate without such written decision and explanation.

(d)(1) A violation of this Code section that occurs with such frequency as to constitute a general business practice shall be a violation of Article 2 of Chapter 6 of this title, the 'Unfair Claims Settlement Practices Act.'

(2) Any claimant aggrieved by a violation of the provisions of this Code section shall have a private cause of action for injunctive relief, treble damages, and any other relief available under law.

(e) The Commissioner shall promulgate rules and regulations necessary to implement this Code section, which may include, but shall not be limited to, prescribing uniform supplemental estimate and written explanation forms."

SECTION 4.

All laws and parts of laws in conflict with this Act are repealed.