BILL NUMBER: SB 1371	CHAPTERED  09/28/08

	CHAPTER  526
	FILED WITH SECRETARY OF STATE  SEPTEMBER 28, 2008
	APPROVED BY GOVERNOR  SEPTEMBER 28, 2008
	PASSED THE SENATE  AUGUST 7, 2008
	PASSED THE ASSEMBLY  JULY 14, 2008
	AMENDED IN ASSEMBLY  JUNE 26, 2008
	AMENDED IN ASSEMBLY  JUNE 18, 2008
	AMENDED IN SENATE  APRIL 22, 2008
	AMENDED IN SENATE  APRIL 9, 2008

INTRODUCED BY   Senator Correa

                        FEBRUARY 21, 2008

   An act to add Section 758.6 to the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1371, Correa. Insurance: automobile repair capping.
   Existing law prohibits insurers from engaging in specified acts
relating to automotive repair.
   This bill would prohibit insurers from capping paint and materials
charges, as defined.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares the following:
   (a) Today, methodologies that are accepted by both automobile
repair shops and insurers are available to determine the cost of
paint and related materials. These accepted industry methodologies
include manuals and estimating systems that set out the refinish
labor units required to paint a particular portion of an automobile,
such as a hood, fender, rocker panel, and so forth. The paint and
material charge is calculated by multiplying the refinish unit times
the refinish rate. Additional accepted industry methodologies that
are available involve software programs, which calculate the paint
and materials charges.
   (b) "Capping" occurs when the cost of paint and related materials
determined by any of these accepted industry methodologies is ignored
by an insurer. For example, an accepted industry methodology
determines a cost of seven hundred dollars ($700.00) for paint and
related materials, and the insurer, as a standard practice, offers
three hundred fifty dollars ($350.00), an amount that is unrelated to
the paint and material charges that would be determined by any of
the accepted industry methodologies.
   (c) Pricing agreements involving discounts that are entered into
voluntarily between an automobile repair shop and an insurance
company constitute neither "capping" nor an accepted industry
methodology used in determining paint and material charges.
  SEC. 2.  Section 758.6 is added to the Insurance Code, to read:
   758.6.  Insurers shall not engage in capping. For the purposes of
this section, "capping" means offering or paying an amount that is
unrelated to a methodology used in determining paint and materials
charges that is accepted by automobile repair shops and insurers.