Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Consumer Protection Auto Insurance topic
No spam. Unsubscribe anytime.
DFR presents auto‑insurance study, recommends regulatory clarifications rather than sweeping mandates
Summary
The Department of Financial Regulation presented a study required by Act 32 of 2023 that found rising repair and labor costs and recommended updates to Regulation 79‑2 (guidelines for labor rates, disclosure improvements, consumer materials and targeted rulemaking) rather than mandating fixed labor rates or OEM‑only rules.
Mary Block, deputy commissioner of insurance at the Department of Financial Regulation, presented the department's report on auto insurance and repair practices required by Act 32 of 2023. The department described its methods — information requests to insurers, interrogatories, interviews, a survey of repair shops, contractor actuaries and an examination firm — and said staff reviewed roughly 950 relevant complaints over a five‑year period.
Block told the committee Vermont has a competitive market (about 70 insurers) and historically low uninsured‑motorist rates but has seen premiums inch upward as repair and replacement costs rise. The department cited several cost drivers: increased vehicle complexity and embedded sensors that raise repair costs, supply‑chain delays for parts, and pressure on small repair shops from tight labor markets and rising business costs.
On remedies, the department recommended targeted updates to Regulation 79‑2 rather than broad statutory mandates. Block said the department plans guidance to help insurers document labor‑rate methodology and to create objective criteria the department can use to test claims about what is "reasonable." The report proposes consumer‑facing materials such as a "consumer bill of rights," improved web tools and enhanced disclosures about aftermarket parts and betterment where appropriate.
DFR acknowledged practical challenges — dispute resolution between shops and insurers, steering concerns when insurers suggest shops, cross‑state repair availability for certain vehicles, and rental‑car timing when parts are delayed — and emphasized that clearer regulatory standards will enable enforcement. Block said the department will pursue rulemaking to clarify standards and build auditing capacity rather than immediately seek extreme legislative fixes.
Why it matters: The report maps where insurers and repair shops disagree on costs and documentation, and it recommends regulatory clarifications intended to reduce disputes, improve consumer information and enable enforceable standards.
Next steps: DFR will begin rulemaking and publish guidance and draft standards; committee members thanked the department and signaled additional floor scheduling on related bills.
