Section 56.05 - Participating Repair Shop Endorsement PlansNo plan shall be approved unless it contains each of the following provisions:
(1)Participating Repair Shop Endorsement. An insurer offering a participating repair shop endorsement shall use the endorsement language as follows: If we offer a "participating repair shop endorsement", you may, at your option, agree to have this endorsement added to and incorporated as part of your policy, under the endorsement, we must, at the time you purchase your policy, reduce your premium for collision, limited collision and comprehensive coverages by % [between 5% and 15%, unless deviation is filed with Commissioner]. In exchange for this discount on your premium, you must agree that, in the event of a claim under any of these coverages, you will have your auto repaired at a participating repair shop designated by us. The participating repair shop must be geographically convenient for you and must perform repairs of comparable quality to those made by non-participating repair shops.
In order to receive the discount, you must have all repairs, except for emergency repairs, performed at the participating repair shop we designate. If you have repairs performed at a non-participating shop, we do not have to pay more than ______ % [no less than 80%] of what we would have paid to one of our participating shops.
(2)Claims Procedure. The insurer shall describe the appropriate claims mechanism for insureds who choose to have the endorsement added to their policy. Insureds may be instructed to proceed under a direct payment system, a completed work claim system, or to follow some other arrangement the insurer has developed for payment to its participating shops for repairs performed in accordance with the endorsement. In any case, the insured must retain the right of electing not to repair the vehicle, receiving a check for the amount of the damage and having the actual cash value of the vehicle reduced accordingly.(3)Discount on Premium Charges. (a) Except for those insureds residing in areas for which the insurer has obtained a waiver, the insurer shall make available to every proposed insured or insured an appropriate discount on collision, limited collision and comprehensive coverages to reflect the estimated savings through participation in the participating repair shop plan. If the discount falls within the range of 5% to 15% of the otherwise applicable premium for those coverages, the discount shall be presumed to be reasonable. If such discount deviates from the above-mentioned range of 5% to 15%, such deviation shall be allowed only if the Commissioner finds that the discount that the insurer desires to offer is adequate, not excessive, just, and reasonable. Every application for permission to so deviate shall be filed with the Commissioner, specifying the basis therefor and shall be accompanied by the data or other information upon which the applicant relies.(b) An insured who chooses not to add the participating repair shop endorsement at the time of purchase of the policy may elect to add it at any time prospectively, at which time the insured shall receive a pro-rata discount on collision, limited collision and comprehensive coverages. An insured who chose to add the endorsement at the time of purchase of the policy may have it removed at any time prospectively, upon repayment of the pro-rata amount of the discount initially received.(4)Designation of Participating Repair Shop(s). At least one geographically convenient participating repair shop must be designated at the time of purchase or renewal of the policy, to be updated at the time of any claim arising under the policy. At regular intervals no less than quarterly, the insurer shall notify its insured of any changes in the list. Upon request of the insured, the insurer shall make available a current list of participating repair shops. All participating repair shops shall be listed in the same manner in any directory distributed to insureds.(5)Disclosure Statement and Acknowledgement. Each insured shall receive, at the time of purchase or renewal of a policy, a disclosure statement describing the rights and duties under the participating repair shop plan, and the premium discount available, as required by 211 CMR 56.07. If the insured agrees to participate in the plan, the insurer shall add the participating repair shop endorsement to the policy and obtain a written acknowledgment that the insured understands his or her rights and duties under the plan. Samples of the disclosure statement and acknowledgment form shall be included as a part of the filed plan.(6)Limitations on Consumer's Choice of Shop. Once an insured has agreed to have a participating repair shop endorsement added to his or her policy, his or her selection among shops may be limited in accordance with the terms of the plan. A claimant who chooses to have the vehicle repaired at a non-participating repair shop will be subject to a limitation of benefits as provided in 211 CMR 56.05(10).(7)Access. The participating repair shop plan must make available a sufficient number and range of repair shops to provide claimants with adequate access to and availability of participating repair shops for repairs offered on a participating basis. As an alternative, insurers may meet this requirement by providing transportation of the damaged vehicle to and from participating repair shops at the insurer's expense. Failure by an insurer to provide access to a participating repair shop within five business days shall be considered a violation of 211 CMR 56.05(7) and grounds for revocation of the plan or for other action by the Commissioner.(8)Emergency Repairs. If an insured needs to obtain emergency repairs and cannot reasonably reach a participating repair shop, payment for such repairs shall be a matter for negotiation between the insurer and the non-participating repair shop. Under no circumstances shall the insured be charged more than the applicable deductible for such emergency repairs.(9)Grievances. An adequate complaint and grievance system must exist which permits insureds to appeal coverage decisions, including a mechanism to appeal utilization review decisions which result in denial of payment or denial of access to repairs or which concern alleged poor quality repairs by a participating repair shop.(10)Limitations on Coverage of Repairs Performed at Non-participating Shops. A plan may provide that the insurer may limit payment for non-emergency repairs performed at a non-participating repair shop to no less than 80% of what the insurer would otherwise have paid to one of its participating repair shops.(11)Insurer's Choice of Shops.(a) An insurer's participating repair shop(s) must:1. be registered under M.G.L. c. 100A; and2. have entered into an agreement satisfactory to the insurer to promptly repair vehicles brought or directed to be brought to its premises by the insurer. (b) In determining which registered repair shop(s) will be named as a participating shop, the insurer's selection shall be based primarily on the following criteria: the quality and cost of repairs at a particular shop, the quality of the service given the customer, the responsiveness of the shop to the customers' needs, the ability of the shop to perform repairs without undue delay, the geographic convenience of the shop for the claimant, cooperation of the shop with pre and post-repair inspections and the shop's compliance with applicable laws and regulations. The form of agreement between the participating shop(s) and the insurer may provide adequate assurances that the repair shop will continue to satisfy the insurer as to such criteria.(c) No insurer may refuse to enter into a participating repair shop contract on the basis of religion, race, color, national origin, sex, marital status, or sexual orientation.(12)Waiver. Any individual insurer wishing to implement a participating repair shop plan, but who is unable to reach agreements with a repair shop(s) in a particular geographic location, may petition the Commissioner for a waiver of the otherwise mandatory offer of this plan to all its proposed insureds. The insurer seeking such a waiver shall set forth the specific facts regarding market share, geographic location, availability of repair shops, or other circumstances in support of its petition. No insurer may offer or implement a plan with respect to less than all of its insureds unless and until the Commissioner has granted a petition for waiver.(13)Insurer's Guarantee. If a claimant's vehicle is repaired at one of the insurer's participating repair shops, then the insurer shall guarantee the duration and nature of the guarantee shall be the same as the manufacturer's warranty or any other warranty or guaranty covering the vehicle prior to the date of the accident or claim. No insurer may petition the Commissioner for a waiver of 211 CMR 56.05(13). This guarantee by the insurer shall be in addition to all other guarantees which may be made by the manufacturer and the repair shop. The agreement between the insurer and the repair shop may provide for indemnification of the insurer by the repair shop for any costs associated with such guarantee under such terms and conditions as the parties to the agreement shall specify.Amended by Mass Register Issue 1342, eff. 6/30/2017.Amended by Mass Register Issue 1346, eff. 6/30/2017.