Connecticut AG Calls for Federal Review of Auto Insurer Practices
Date: 09/02/09
Connecticut Attorney General Richard Blumenthal held a press conference on Tuesday during which he called on U.S. Attorney General Eric H. Holder, Jr. to investigate and stop insurance company practices that may deny consumers the right to choose their own automobile repair shop.
Connecticut Attorney General Richard Blumenthal held a press conference on Tuesday during which he called on U.S. Attorney General Eric H. Holder, Jr. to investigate and stop insurance company practices that may deny consumers the right to choose their own automobile repair shop.
Holding petitions from auto repairer associations from across the country, Blumenthal said he will seek to enlist other attorneys general in his effort.
Blumenthal said practices that steer consumers to preferred shops may violate current law and a decades-old consent decree between the federal government and several insurance companies.
Blumenthal said, "Almost 50 years later, insurer steering is still a scourge. This outpouring of complaints shows that problematic practices persist, despite a 1963 consent decree and current law. Auto repairers and consumers are victims of the very same misconduct today: insurer control of appraisers, insurer financial incentives and steering of consumers to preferred auto facilities, and setting labor rates that repair facilities must use. Both federal and state law enforcers should send a message: your car, your choice.
"Practices pressuring consumers to use insurers' preferred repair shops suppress consumer choice and disregard legal duties. I have long sought legislative and administrative solutions to this untenable situation. We're asking the federal government for an immediate review and remedy to stop coercive and deceptive tactics. Effective enforcement is critical."
"I am calling for federal review of the current property casualty insurer system of compensation for auto repair services and determination as to whether such practices violate the 1963 consent order or current federal laws."
Blumenthal was joined by shop owners and members of the Auto Body Association of Connecticut (ABAC) at the press conference to announce the action.
"Despite a four-decade old decree against these unlawful practices, insurance companies continue to coerce and manipulate consumers to repair their cars at facilities selected by insurance companies, taking away consumer freedom of choice," said Bob Skrip, ABAC president. "We have presented Atty. Gen. Blumenthal with petitions calling for enforcement of existing federal laws on this issue and we are grateful that today he is announcing his enthusiastic support."
The petition, circulated by the ABAC earlier this year, claims that a U.S. Department of Justice entered into a consent decree in 1963 with several property casualty insurer associations and their members in which the insurers were ordered to stop: