Senate bill referees small business vs. Safelite complaint

Published February 16, 2012

By Ashley Byrd | South Carolina Radio Network

A bill headed to the Senate floor pits a larger multi-national company and insurance interests against a group of small businesses in the state.

Business owners on both sides crowded Senate Banking and Insurance Committee

Wednesday, state senators amended and approved H. 4042 to attempt to spur competition in windshield repair. Attorneys and business owners on both sides of the issue were out in force at the Statehouse as senators wrestled with the bill that easily passed the House.

At issue:  Safelite Solutions operates a claims call center for more than 100 insurance providers, and Safelite AutoGlass is a major repair vendor. Smaller, locally owned companies want a state law to control this connection as well as any of the market advantage Safelite may get from the information it collects.

Alan Epley, an independent glass repair contractor says, “They have the conflict of interest of having glass installation facilities around the state, but yet are also taking claims calls. Therefore they have a financial interest in directing each and every claim to their own facilities.”

But insurance companies depend on call centers like this, known as third-party administrators (TPAs), to distribute claims to an insurance-approved network of repair shops. Insurance industry spokesman Russ Dubisky says the bill – and a last-minute amendment to it – may undermine the networks they established to assure a certain quality of work. The bill as amended mandates that TPAs offer a rotating list of choices, but may include any business who wants to be on the list.

Brian DiMasi, Safelite’s senior corporate attorney was at the Senate Banking and Insurance Committee meeting. He says insurance customers should worry about“fly by night” windshield harvesters being on that list.

Insurance industry consultant Bob Herlong says a law like this could increase costs to consumers, whom he says are not complaining about the way things are handled now.

“We don’t even think its the proper role of government to interfere in the business process to keep small businesses in business. We always pull for the small business but there’s no guarantee that any business has that by law it will succeed,” says Herlong.

Frank Knapp of the SC Small Business Chamber of Commerce says that his clients want fair access to customers.

“It hits to the heart of protection of small businesses and having a level playing field,” he says.

The amended bill attempts to address the complaints of the smaller contractors but the insurance industry wants to weigh in since it regulates how it will serve its customers.

But the measure heads to a crowded Senate, with a minority report attached, making it less likely to get debated this session.

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