Iowa Gov. Kim Reynolds has signed new legislation governing automobile glass repair and insurance claims, establishing new requirements for repair shops and restrictions on consumer and insurer practices.
The law introduces provisions related to advanced driver assistance systems (ADAS), fees, and consumer inducements.
Under the statute, policyholders are no longer permitted to reassign post-loss benefits, including any rights, duties, or benefits under their insurance policies. While insurers cannot require the use of a particular repair facility, they may still suggest preferred vendors and operate within existing repair networks.
The law also includes restrictions on consumer incentives. Repair facilities are now prohibited from offering gifts, cash, or similar inducements to secure business from consumers. Additionally, repairers are not allowed to begin work on first-party claims unless a claim has been filed and a claim or referral number has been issued by the insurer.
The statute also outlines billing and claims procedures for repairers. Shops may not charge unreasonable fees, submit false documentation, or misrepresent repair costs. They are also prohibited from stating that an insurer has approved a repair unless confirmation has been received.
The law requires shops to provide a good-faith estimate before work begins and to issue a detailed invoice upon completion.
The legislation, which originated as a Senate study bill, remained largely intact through the legislative process before receiving final approval. It adds regulatory oversight in response to evolving technologies in vehicle safety systems and aims to address concerns over transparency and consistency in auto glass repair claims handling.
In November, the Iowa Insurance Division (IID) issued Bulletin 24-04, aligning with the National Association of Insurance Commissioners' (NAIC) model guidance on artificial intelligence (AI) in insurance.
This bulletin emphasizes that insurers must ensure their AI-driven rating models comply with existing laws prohibiting excessive, inadequate, or unfairly discriminatory rates, regardless of the methodologies employed.
Additionally, the IID updated Chapter 90 of the Iowa Administrative Code in April 2024 to remove restrictive terms and provide clearer guidance on financial and health information regulation. This revision aims to enhance regulatory clarity for insurers operating within the state.
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