A BILL TO BE ENTITLED
AN ACT to protect consumers by prohibiting coercive and discriminatory practices in the repair of motor vehicles and automobile glass repair and replacement, by providing for more consumer disclosure by insurers in the collision repair process, and by imposing stricter motor vehicle damage and automobile glass repair regulations and penalties on insurers.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 58‑3‑180 reads as rewritten:
"§ 58‑3‑180.  Motor vehicle repairs; selection by claimant; prohibited practices; penalties.
(a)	A policy covering damage to a motor vehicle shall allow the claimant to select the repair service or source for the repair of the damage, including the repair service or source for the repair or replacement of automobile glass.
(b)	The amount determined by the insurer to be payable under a policy covering damage to a motor vehicle shall be paid regardless of the repair service or source selected by the claimant.
(b1)	No insurer or insurer representative shall:
(1)	Suggest or recommend the use of a particular motor vehicle repair service or a particular automobile glass repair or replacement service unless a referral is expressly requested by the claimant. 
(2)	Own or hold a controlling interest in either a motor vehicle repair service or an automobile glass repair or replacement service that performs services arising from automobile insurance claims.
(3)	Make or issue, or cause to be issued, any written or oral statement that willfully misrepresents a motor vehicle repair service or automobile glass repair or replacement service or that willfully disparages a motor vehicle repair service or automobile glass repair or replacement service chosen by the claimant as to the quality, cost, conditions, or benefits of using the particular repair service chosen by the claimant.
(4)	Discriminate against a claimant or claimant's chosen motor vehicle repair service or automobile glass repair or replacement service in any way whatsoever.
(5)	Refuse to acknowledge a claimant's choice of a motor vehicle repair service or automobile glass repair or replacement service.
(6)	Refuse to insure or continue to insure an individual or limit the amount, extent, or kind of coverage available to the individual due to the claimant's choice of a motor vehicle repair service or automobile glass repair or replacement service.
(7)	Limit or discount the reasonable basis of the repair cost based on charges that would have been incurred had the motor vehicle been repaired by the insurer's suggested or recommended repair service, if the claimant elects to have the motor vehicle repaired at a repair service of that person's choice.

(b2)	If the insurer or insurer representative suggests or recommends a particular motor vehicle repair service or automobile glass repair or replacement service to the claimant, the insurer shall inform the claimant that (i) the insurer is prohibited by law from requiring that the repairs be done by a specific motor vehicle repair service or automobile glass repair or replacement service, (ii) the claimant is under no obligation to use the recommended repair service, (iii) the claimant may use the repair service of the claimant's choice, (iv) the amount determined by the insurer to be payable under the policy will be paid regardless of whether or not the claimant uses the recommended repair service, (v) the damaged motor vehicle will be restored to its condition prior to the loss at no additional cost to the claimant other than as stated in the insurance policy or otherwise allowed by law, (vi) the claimant should contact the insurer if the claimant experiences a problem with the repair of the motor vehicle or the repair or replacement of the automobile glass, (vii) the insurer is receiving discounts under a direct repair contract, if applicable, and (viii) the insurer or insurer representative has, at the time the recommendations are made, a financial interest in the recommended motor vehicle repair service or automobile glass repair or replacement service, if applicable.
If the insurer makes an oral recommendation of a particular motor vehicle repair service or automobile glass repair or replacement service and the claimant accepts the recommendation, the insurer shall provide the information required by this subsection in writing in no less than 10‑point type within five calendar days from acceptance of the oral recommendation. The provisions of this subsection shall be included in nonfleet private passenger motor vehicle insurance policy forms promulgated by the Bureau and approved by the Commissioner.
(c)	Any person who violates this section is subject to the applicable provisions of G.S. 58‑2‑70 and G.S. 58‑33‑46, provided that the maximum civil penalty that can be assessed under G.S. 58‑2‑70(d) for a violation of this section is  five thousand dollars ($5,000). A violation of this section includes:
(1)	Alluding to or suggesting that the insurer will participate in the warranty of or guarantee of repairs by a recommended motor vehicle repair service or automobile glass repair or replacement service, unless the insurer has in writing expressly exercised the option to repair as allowed in the insurance policy. Once the insurer has exercised the option to repair, the insurer shall then assume full warranty and liability for the repairs.
(2)	Implying or suggesting that a motor vehicle repair service or automobile glass repair or replacement service chosen by the claimant is somehow inferior or inconvenient to a repair service on the insurer's list of repair services.
(3)	Typing of services. – Unless it is in accordance with the insurance policy or applicable law, no person shall imply, suggest, or allude that the insurer's option to pay for the claimant's losses in money shall be compromised or in any way diminished if the claimant chooses to use the repair service of that person's choice.
(4)	Failure to disclose to the claimant at the time that the insurer or insurer representative recommends the use of a designated repair service in connection with settling or paying any claim arising under a policy of insurance that the insurer has agreed to discounts or concessions in parts, labor, materials, or procedures as specified by the insurer that is not transferable to the claimant, if the concessions or discounts do not exist.
(5)	Any act of coercion or intimidation causing or intending to cause any licensed motor vehicle repair service or automobile glass repair or replacement service to violate this section.
Violators of this section are liable for damages suffered by the claimant or repair service, including attorneys' fees.
(d)	As used in this section, "insurer representative" includes an insurance agent, limited representative, broker, adjuster,  appraiser, third‑party administrator, or any person acting either directly or indirectly on behalf of an insurer."
SECTION 2.  G.S. 58‑2‑70(d) reads as rewritten:
"(d)	If the Commissioner orders the payment of a monetary penalty pursuant to subsection (c) of this section, the penalty shall not be less than five hundred dollars ($500.00) nor more than five thousand dollars ($5,000). In determining the amount of the penalty, the Commissioner shall consider the degree and extent of harm caused by the violation, the amount of money that inured to the benefit of the violator as a result of the violation, whether the violation was committed willfully, and the prior record of the violator in complying or failing to comply with laws, rules, or orders applicable to the violator. The clear proceeds of the penalty shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2. Payment of the civil penalty under this section shall be in addition to payment of any other penalty for a violation of the criminal laws of this State."
SECTION 3.  G.S. 58‑63‑15(2) reads as rewritten:
"(2)	False Information and Advertising Generally. – Making, publishing, disseminating, circulating, or placing before the public, or causing, directly or indirectly, to be made, published, disseminated, circulated, or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station, or in any other way, an advertisement, announcement or statement containing any assertion, representation or statement with respect to the business of insurance or with respect to any person in the conduct of his insurance business, motor vehicle repair business, or automobile glass repair or replacement business, which is untrue, deceptive or misleading."
SECTION 4.  G.S. 58‑63‑15(3) reads as rewritten:
"(3)	Defamation. – Making, publishing, disseminating, or circulating, directly or indirectly, or aiding, abetting or encouraging the making, publishing, disseminating or circulating of any oral or written statement or any pamphlet, circular, article or literature which is false, or maliciously critical of or derogatory to the financial condition of an insurer, and which is calculated to injure any person engaged in the business of insurance or in the business of motor vehicle repair or automobile glass replacement or repair."
SECTION 5.  G.S. 58‑63‑15(4) reads as rewritten:
"(4)	Boycott, Coercion and Intimidation. – Entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance or in the business of motor vehicle repair or automobile glass replacement or repair."
SECTION 6.  G.S. 58‑63‑15 is amended by adding a new subdivision to read:
"(14)	Fraudulent, coercive, or dishonest practices. – Using fraudulent, coercive, or dishonest practices in the settlement of a claim or demonstrating incompetence, untrustworthiness, or financial irresponsibility in the conduct of business in this State, including acts for which an insurance producer license is denied or suspended."
SECTION 7.  Article 1 of Chapter 75 of the General Statutes is amended by adding a new section to read:
"§ 75‑39.  Restrictions on motor vehicle repair and automobile glass repair or replacement.
(a)	No person, business, or other legal entity doing business in this State that installs, repairs, or replaces automobile glass knowingly shall engage in any of the following acts:
(1)	Offer to finance payment of a customer's deductible on terms different from terms offered to customers not making an insurance claim.
(2)	Engage in a pattern or practice, on more than an occasional or isolated instance, of promising or offering to provide any credit, incentive, gift, rebate, or special financing arrangement in satisfaction of all or part of an insurance deductible or co‑payment owed by the insured under a policy of insurance.
(3)	Advertise, promote, or represent by any media, telemarketers, or others, that services are 'free' if in fact an insurer will pay for the service or advertise or make offers for the purpose of soliciting a claim against a property or casualty insurer.
(4)	Engage in a pattern or practice, on more than an occasional or isolated instance, of offering to defer collection of, discount, or issue a repayment of a customer's deductible based in whole, or in part, on the availability of insurance coverage.
(b)	No insurer or insurer representative as that term is defined in G.S. 58‑3‑180 knowingly shall require a claimant to have a damaged vehicle repaired at a particular motor vehicle repair service. 
(c)	A violation of this section shall be considered an unfair trade practice, as prohibited by G.S. 75‑1.1.
(d)	Any person who suffers an economic loss as a result of the violation of this section may bring an action to recover damages in the General Court of Justice. Actions brought pursuant to this section shall be tried in the county where the violation occurred or in any county where the defendant resides or conducts, transacts, or has transacted business."
SECTION 8.  This act becomes effective October 1, 2005.