A bill

 

TO AMEND THE SOUTH CAROLINA CODE OF LAWS BY AMENDING SECTION 38-57-75, RELATING TO VEHICLE GLASS REPAIR PROCEDURES, SO AS TO ADD DEFINITIONS PERTAINING TO VEHICLE GLASS REPAIR FACILITIES, RATES, CONDITIONS, AND AFFILIATIONS; TO PROHIBIT STEERING; TO REQUIRE DISCLOSURES; TO REGULATE INSURER AND THIRD-PARTY ADMINISTRATOR PRACTICES; TO ESTABLISH REIMBURSEMENT STANDARDS FOR VEHICLE GLASS REPAIR AND ADAS RECALIBRATION; TO REQUIRE FACILITY ACCREDITATION; TO PROVIDE ENFORCEMENT AUTHORITY TO THE DEPARTMENT OF INSURANCE; TO IMPOSE PENALTIES AND FEES; AND TO CREATE PRIVATE RIGHTS OF ACTION.

 

Be it enacted by the General Assembly of the State of South Carolina:

 

SECTION 1.  Section 38-57-75 of the S.C. Code is amended to read:

 

    Section 38-57-75.  (A) As used in this section:

       (1) "Independent Repair Facilities" means facilities identified through publicly available repositories, including, but not limited to, those maintained by the Automotive Glass Safety Council, Independent Glass Association, or the South Carolina Secretary of State's business registry and not solely from insurer or third-party administrator data.

       (2) "Prevailing Competitive Market Rates" means the typical prices charged by a representative cross-section of independent and affiliated automotive glass repair, replacement, and recalibration facilities operating within a defined geographic service area in South Carolina, for substantially similar services performed under similar conditions. These rates must be based on actual retail market data and not dictated solely by an insurer, third-party administrator, or affiliated entity.

       (3) "Local Market Conditions" means objective, verifiable factors that impact the cost of providing automotive glass services within a geographic area of South Carolina.

       (4) "Affiliation" means any direct or indirect ownership interest, shared management, shared branding, contractual control, or other arrangement that creates a financial or operational relationship between an insurer, third-party administrator, and a vehicle glass repair facility.

       (5) "Department" means the Department of Insurance.

    (A)(B) When an insured has suffered damage to the glass of a motor vehicle, "vehicle glass", both the insurer providing glass coverage and the third partythird-party administrator that administers glass coverage for that insurer must may not require that repairs, replacement, or calibration of automobile safety glass be made to the insured's vehicle by at a particular facility, whether directly or indirectly affiliated with the insurer or administratorprovider of glass repair work.

    (B) In processing a vehicle glass claim, a third party administrator must immediately disclose to the insured that the third party administrator is acting on behalf of the insurer.

    (C) When a claim for motor vehicle glass repair, replacement, or advanced driver assistance system (ADAS) recalibration is reported to an insurer, the insurer or its third-party administrator must clearly disclose:

       (1) the insured's right to select any licensed repair facility;

       (2) whether the entity handling the claim is a third-party administrator and not the insurer; and

       (3) whether the recommended facility has any ownership or financial affiliation with the insurer or third-party administrator.

    (C) (D) Immediately after verification of coverage and evaluation of the damage, an insurer or third partythird-party administrator must ascertain whether an insured has a provider of choice. An insurer or third-party administrator:

       (1) may not misrepresent that choosing a non-network facility will cause claim delays, reduced coverage, or loss of warranty;

       (2) shall provide a list of accredited shops that must include all known independent repair facilities located within the insured's service area; or

       (3) may not prioritize affiliated facilities through scripts, automated call handling or electronic systems.

    (D)(E) When an insured requests to have covered glass repair work performed by a specific provider of choice, the insurer or third party administrator must determine whether the selected shop is a member of the insurer's or third party administrator's vehicle glass repair program or preferred provider list. If the provider of choice is a member of the insurer's vehicle repair program or preferred provider network, the insurer or its third partythird-party administrator must assign the claim and provide a claim or reference number at that time to the provider of choice.

    (E)(F) When an insured requests to have covered glass repair work performed by a provider who is not a member of the insurer's or third partythird-party administrator's vehicle repair program or preferred provider list, the insurer or third partythird-party administrator:

       (1) must confirm that the provider agrees to perform the repair at the insurer's fair and reasonable rate of reimbursement. If the provider refuses to accept the rate, the insurer or third party administrator may inform the insured that he will be responsible for additional costs. If the provider agrees to accept the fair and reasonable rates, no further statements regarding costs shall occur and the provider must be paid the agreed fair and reasonable rate of reimbursement; Shall provide reimbursement for glass repair, replacement, and recalibration services that reflects prevailing competitive market rates and may not be set solely by the insurer, a third-party administrator or any affiliated entity.

           (a) Reimbursement shall not be tied exclusively to a single pricing benchmark, including but not limited to the National Auto Glass Specifications list price, unless adjusted to reflect actual prevailing market rates in South Carolina.

           (b) Any use of pricing benchmarks must be accompanied by a transparent methodology demonstrating alignment with prevailing local market conditions.

           (c) Reimbursement frameworks must be fair, transparent, and negotiated in good faith with independent repair facilities. Insurers and third-party administrators shall publish reimbursement methodologies upon request to ensure accountability and prevent unilateral rate-setting.

           (d) Prevailing competitive market rates may be established using one or more of the following:

               (i) Independent surveys of retail transaction prices charged by a representative rage of providers in the geographic area;

               (ii) Review of anonymized claims reimbursements data submitted to or obtained by the Department;

               (iii) Adjusted use of pricing benchmarks, provided such benchmarks are localized and account for actual prevailing local market conditions; and

               (iv) Inclusion of all known independent repair facilities identified through public registries maintained by industry associations or state agencies, and not solely through insurer or TPA-controlled databases.

           (e) Local market conditions include but are not limited to:

               (i) Prevailing wages and benefits for certified automotive technicians;

               (ii) Wholesale prices and availability of OEM an aftermarket glass and related components;

               (iii) Expenses related to ADAS recalibration equipment, tools, software, and training;

               (iv) Overhead costs such as rent, utilities, insurance, and regulatory compliance;

               (v) Geographic variations in urban, suburban, and rural areas; and

               (vi) Actual retail transaction prices charged to consumers by a cross-section of providers, excluding insurer of TPA-imposed discounts or proprietary schedules.

       (2) must inform the insured that he or she may use the requested provider of choice;  and

       (3) must not make statements regarding the warranty offered by the provider of choice. If an insured asks the insurer or third partythird-party administrator questions regarding a provider's warranty, the insurer or third partythird-party administrator must refer the insured to the provider for clarification.; and

       (4) whenever glass replacement requires advanced driver assistance system recalibration, coverage must include reimbursement for recalibration performed in accordance with OEM specifications.

    (F)(G) When an insured does not request to have covered glass repair work performed by a specific provider of choice, the insurer or third party administrator may refer the repair to a vehicle glass repairer who is a member of the insurer's or third party administrator's preferred network of providers. If an insurer or third party administrator provides a list of accredited facilities, then the list must include all known independent network and non-network repair facilities located within the insured's service area. All recommendations must include clear disclosure of whether a recommended shop is owned, managed, or affiliated with an insurer, third-party administrator, or any subsidiary thereof.

    (G) (H) A vehicle glass repair or replacement facility, including any agent, contractor, vendor, representative, or anyone acting on its behalf, must not:

       (1) threaten, coerce, or intimidate an insured to file a claim for vehicle glass repair or replacement;

       (2) engage in unfair or deceptive practices to induce an insured to file a vehicle glass repair claim;

       (3) induce an insured to file a vehicle glass repair claim when the damage to the vehicle glass is insufficient to warrant vehicle glass repair or replacement;

       (4) perform vehicle glass repair or replacement services under an insurance policy without first obtaining insurer approval;

       (5) make any representations to an insured as to the vehicle glass coverage available under the insurance policy, including, but not limited to, representations that the insured is entitled to a free windshield;  or

       (6) represent verbally, electronically, or in any other way, including, but not limited to, advertisements, websites, or any marketing materials that a claim for a windshield replacement under an insurance policy is free.

    (H) (I) The owner, lessee, or insured driver of the vehicle, or the designee of the owner, lessee, or insured driver of the vehicle, if any, must be party to the filing of a vehicle glass repair claim, otherwise known as first notice of loss. A provider of vehicle glass repair services may not serve as the designee for the insured.

    (I) (J) When an insurer or third party administrator determines that an insured's requested glass repair must be physically inspected, and the inspection is carried out by a representative of a third party administrator, that representative must not make any offer to make repairs, engage in any discussion of other glass repair facilities, or recommend any glass repair facility during the course of the inspection.

    (J) (K) An insurer, agent, or third partythird-party administrator only may provide information about a claim to a vehicle glass repairer after the insured has selected that repairer to provide glass services.

    (K) (L) The provisions of this section do not apply to insurers or third party and third-party administrators, who do not have a ten percent or greater ownership interest in a vehicle glass repair business of ownership interest, management control, or affiliation with a vehicle glass repair business.

    (L) (M) Violations of this section are subject to the provisions of the South Carolina Insurance Unfair Claim Practices Act and the Title 39, Chapters 3 and 5 of the South Carolina Unfair Trade Practices Act.

    (M)(N) Notwithstanding the provisions of this chapter, the insurer has the right to inform the insured that the insurer will not guarantee the work performed by a provider that is not in the network of the insurer or third party administrator. An insurer may disclose the scope of any warranty or guarantee it offers on repairs performed through its preferred network. However, such disclosure must be made in a factual and non-disparaging manner and may not be used to discourage or dissuade an insured from selecting a non-network or independent provider.

    (O) No person, business, or facility may perform automobile glass repair, replacement, or advanced driver assistance system recalibration on an insured vehicle for reimbursement under an automobile insurance policy unless the facility is accredited under nationally recognized safety standards, including but not limited to ANSI, AGSC, AGRSS 005-2022, or an equivalent accreditation recognized by the Automotive Glass Safety Council or Independent Glass Association. Proof of current accreditation shall be maintained on file and made available upon request by the Department.

    (P) Any person deemed violating the provisions of this section is guilty of a misdemeanor and upon conviction:

       (1) for a first offense, fined not less than one hundred dollars but not more than five hundred dollars;

       (2) for a second offense, a fine of not less than two thousand dollars but not more than five thousand dollars;

       (3) for a third or subsequent offense, less than ten thousand dollars.

    (Q) The Department shall establish and maintain a compliance and audit program to monitor insurer and third-party administrator practices under this section. Independent automotive glass repair facilities shall have the right to submit evidence of violations, and the Department shall issue annual public reports on enforcement actions taken.

    (R)(1) Each insurer and third-party administrator engaged in the administration of motor vehicle glass claims in this State shall pay an annual compliance fee of not more than five hundred dollars per calendar year, accessed and collected by the Department.

       (2) Fees collected shall be deposited into a dedicated Automobile Glass Enforcement Fund and used exclusively to support compliance monitoring, accreditation verification, and consumer protection under this section.

       (3) The Department is authorized to set fees by regulation, at a level sufficient to cover the reasonable costs of administration and enforcement.

    (S) In addition to any criminal penalties, individuals who knowingly direct, authorize, or carry out violations of this section on behalf of an insurer or third-party administrator may be held personally liable and subject to civil litigation.

    (T) Any insured or claimant who suffers actual damages as a result of a violation of this section, including, but not limited to, steering, misrepresentation, denial of coverage, or reimbursement practices that substantially lessen competition shall have a private right of action against the insurer, third-party administrator, or repair facility that committed the violation.

    (U) If the plaintiff in a civil action brought pursuant to this section prevails by proving, by a preponderance of the evidence, that the defendant violated, or attempted to violate a provision of this section, then the court shall award statutory damages of not less than two thousand five hundred dollars for each violation in addition to:

       (1) actual damages;

       (2) reasonable attorney's fees and court costs; and

       (3) treble damages where willful misconduct is proven.

    (V) Nothing in this section shall be construed to impose liability on an insurer for the workmanship of an unaffiliated provider selected by the insurer.

    (W) Nothing in this section prevents an insured from selecting a non-accredited provider at their own expense. However, insurers and third-party administrators are only obligated to reimburse for work performed by accredited facilities.

 

SECTION 2.  This act takes effect upon approval by the Governor.

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