A proposed bill in Mississippi that would have held body shops to a labor rate based on an undefined national average has officially been tabled after lobbying from the state’s collision repair association along with outreach to the insurance industry.
“As of Feb. 23, that legislation is dead,” says John Morgan Hughes, executive director of the Mississippi Collision Repair Association.
Earlier this year, State Senator Videt Carmichael (R.-Meridian), chairman of the Senate insurance committee, introduced Senate Bill 2187, which would have prevented body shops from charging a labor rate higher than the “national average.”
The proposed bill would have added the following language to Mississippi Code 83-11-501: “In no event shall a motor vehicle repair shop charge labor rates above the average national rate charged for like-kind work, without he express approval of the Commissioner of Insurance.”
However, there was no indication of what national average would be used, who would establish it, or if it would include data from DRP agreements. “Who would define that?” Hughes says. “As far as I know, no other states have operated under anything like that, and naturally our members had a lot of concerns.”
The Mississippi Collision Repair Association met with the Lieutenant Governor’s staff, and launched a campaign to get member shops to contact their own local legislators. The Association also launched a competing bill in the lower chamber (sponsored by Rep. Becky Currie) that would have required insurers to pay for proper repairs as defined by national OEM standards.
“It’s important to understand that we called our membership into action so that both sides of this story could be told,” Hughes says. “Sometimes a small business owner with 12 employees in a small town can really have more sway with an individual legislator than an insurance company. It’s important that shop owners get involved in their state associations so that when these things happen, we can speak with one voice. Our success here is a great testament to the power of the associations.”
According to Hughes, it was the Association’s meeting with Senator Carmichael that finally brought the two sides together and effectively killed the bill. “Chairman Carmichael was a consummate professional, and his leadership on this issue is appreciated,” Hughes says. “He understood the issue on both sides, and he encouraged our Association and shop owners to come together with the insurance companies to work out some type of amicable solution.”
Hughes says the Association plans to meet with the state’s largest insurance carriers and the local state insurance coalition within the next few weeks.
There has been tension between Mississippi repairers and insurers for several years. Last year, Association president John Mosley, owner of Clinton Body Shop, challenged incumbent Insurance Commissioner Mike Chaney in the Republican primary. Mosley, who failed in his primary bid, was also a plaintiff in one of several lawsuits across the country accusing large insurance companies of steering and price fixing. Jackson, Miss.-based Eaves Law Firm was the lead counsel on several of those lawsuits.
“While our bill isn’t going to be passed either, we feel like there is a spirit of collaboration for the first time from both sides,” Hughes says. “We look forward to the dialogue that is going to happen in the next few weeks with the insurance companies.”
