BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 350|
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THIRD READING
Bill No: SB 350
Author: Yee (D)
Amended: 3/31/09
Vote: 21
SENATE BANKING, FINANCE, AND INS. COMM. : 10-0, 4/15/09
AYES: Calderon, Cogdill, Cox, Florez, Harman, Kehoe, Liu,
Lowenthal, Runner, Wolk
NO VOTE RECORDED: Correa, Padilla
SUBJECT : Aftermarket crash parts
SOURCE : Certified Auto Parts Association
DIGEST : This bill, by placing provisions of a current
Department of Insurance regulation into the Business and
Professions Code, prohibits an insurer from requiring the
use of nonoriginal equipment manufacturer aftermarket crash
parts in the repair of an automobile unless specified
standards are met and specified disclosures are made.
ANALYSIS : Under existing law, California statutory law
defines "Aftermarket crash part" to mean a replacement for
any of the nonmechanical sheet metal or plastic parts which
generally constitute the exterior of a motor vehicle,
including inner and outer panels.
This law defines "Nonoriginal equipment manufacturer
(Non-OEM) aftermarket crash part" to mean aftermarket crash
parts not made for or by the manufacturer of the motor
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vehicle.
Pursuant to a California Department of Insurance regulation
which is now in effect, no insurer shall require the use of
Non-OEM replacement crash parts in the repair of an
automobile unless:
1. The parts are at least equal to the OEM parts in terms
of kind, quality, safety, fit, and performance;
2. Insurers specifying the use of Non-OEM replacement crash
parts shall pay the cost of any modifications to the
parts which may become necessary to effect the repair;
and,
3. Insurers specifying the use of Non-OEM replacement crash
parts warrant that such parts are of like kind, quality,
safety, fit, and performance as OEM replacement crash
parts; and,
4. All OEM and Non-OEM replacement crash parts,
manufactured after the effective date of this
subchapter, when supplied by repair shops shall carry
sufficient permanent, non-removable identification so as
to identify the manufacturer. Such identification is
required to be accessible to the greatest extent
possible after installation; and,
5. The use of Non-OEM replacement crash parts is disclosed
to the insured in accordance with Business and
Professions Code Section 9875 et seq.
Pursuant to the cited Business and Professions Code, no
insurer shall require the use of Non-OEM aftermarket crash
parts in the repair of an insured's motor vehicle, unless
the consumer is advised in a written estimate of the use of
Non-OEM aftermarket crash parts before repairs are made.
In all instances where Non-OEM aftermarket crash parts are
intended for use by an insurer, the written estimate must
clearly identify each such part with the name of its
nonoriginal equipment manufacturer or distributor and the
consumer must be provided a disclosure document (in
10-point type or larger type and attached to the insured's
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copy of the estimate) which states:
"This estimate has been prepared based on the use of
crash parts supplied by a source other than the
manufacturer of your motor vehicle. Any warranties
applicable to these replacement parts are provided by
the manufacturer or distributor of the parts, rather
than by the original manufacturer of your vehicle."
This bill:
1. Codifies provisions now found in Department of Insurance
regulation into the Business and Professions Code to
expressly prohibit an insurer from requiring the use of
nonoriginal equipment manufacturer aftermarket crash
parts in the repair of an automobile unless the insurer:
A. Warrants that the Non-OEM aftermarket crash
parts are at least equal to the OEM parts in terms
of kind, quality, safety fit and performance, and
B. Pays the cost of any modifications of those
parts necessary to effect repairs, and
C. Advises the consumer in a written estimate of
the use of nonoriginal equipment manufacturer
aftermarket crash parts before repairs are made.
2. Specifies all OEM and Non-OEM replacement crash parts,
manufactured after the effective date of this
subchapter, when supplied by repair shops shall carry
sufficient permanent, non-removable identification so as
to identify the manufacturer and specifies such
identification shall be accessible to the greatest
extent possible after installation.
Background
"Crash parts," or "body parts," are parts generally made of
sheet metal, plastic, or glass that constitute the exterior
of a motor vehicle and tend to serve a cosmetic function.
Examples of crash parts include bumper reinforcements and
absorbers, hoods, fenders, door shells, rear outer panels,
deck and trunk lids, quarter panels, truck beds and box
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sides, body side panels, tailgates, and lift gates.
OEM crash parts are made by the manufacturer of a given
motor vehicle for use on that vehicle (e.g., a hood made by
Ford for a Ford vehicle). Non-OEM parts, on the other
hand, are imitation auto parts made by an independent
manufacturer that is generally not affiliated with the
manufacturer of the motor vehicle for which the part is
intended.
Non-OEM manufacturers must "reverse-engineer" the
replacement parts because they do not have access to the
OEM manufacturer's specifications for a given part (because
this information is proprietary). Non-OEM crash parts
typically cost 20 percent to 65 percent less than OEM crash
parts.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/8/09)
Certified Auto Parts Association (source)
Public Citizen
Alliance of Automobile Manufacturers
Association of California Insurance Companies
ARGUMENTS IN SUPPORT : The Certified Auto Parts
Association states that this bill is part of an ongoing
effort to protect consumers from poor quality automobile
aftermarket collision parts. CAPA's letter states it "is a
non-profit organization which oversees a testing and
inspection program that certifies the quality of parts used
in collision repair". CAPA states SB 350 moves the market
closer to ensuring crash repair quality parts by
recognizing not all aftermarket parts are quality parts and
by requiring insurers to use parts that are at least equal
to the original equipment manufacturer parts in terms of
kind, quality, safety, fit and performance.
JA:nl 5/8/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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