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Mississippi bill requires insurers pay market amount for OEM procedures and parts

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A Mississippi bill will require insurance companies to pay the prevailing market amount for a vehicle or glass to be repaired pursuant to the OEM repair procedures and OEM parts or OEM equivalent parts. 

The bill, SB2411, also prohibits insurance companies from suggesting that the insured should use a specific repair facility and from soliciting a referral fee in exchange for referring a policyholder to a facility. 

Sen. Robin Robinson (R-42) introduced the bill, which says the insurance company is required to pay the prevailing market amount within a reasonable geographical or trade area of the insured. 

The amount should cover the prevailing market amount for a properly, fully, and fairly repaired vehicle or glass, the bill says. The bill does not define how the “prevailing market amount” is determined or how “prevailing” is defined, nor what would constitute “fair.”

The bill does define a “proper repair” as one performed pursuant to the OEM’s repair procedures and using OEM, or what is described as “OEM equivalent,” parts.

It says OEM equivalent parts should be properly tested to meet the manufacturer’s specifications. It does not specify what testing, or in what manner the parts must meet the OEM part specifications.

The bill bans the insurer, employees, agents, insurance adjusters, or any entity that employs an insurance adjuster from soliciting or accepting a referral fee or gratuity in exchange for referring an insured or third-party claimant to a repair person or facility. 

The ban includes suggestions, either orally or in writing, to an insured that they must use a specific repair person or facility. This includes a repair person or facility identified on a preferred list compiled by an insurer. 

Under the bill, insurance companies would be required to display provisions of the bill on the face of the insurance policy or certificate in lieu of an insurance policy. 

The bill notes insurance companies are subject to penalties for violating the bill. 

If the bill is passed by legislators, it will take effect after July 1. 

A bill that requires OEM procedures was reintroduced in New York earlier this month. A similar bill was introduced in Texas during its last legislative session that sought to require OEM collision repairs and replacement parts.

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Photo courtesy of Pgiam/iStock

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