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NCOIL Adopts Model Act to Fight Airbag Fraud and Theft

At its annual meeting in New Orleans, LA, the National Conference of Insurance Legislators (NCOIL) adopted a model act for state legislators designed to help states in the fight against the prevalence of faulty airbag repairs and the rising tide of airbag theft. NCOIL approval for the model act, called an "Act Regarding Auto Airbag Fraud", came following three special meetings and several conference calls in previous months leading up to the annual meeting.

NCOIL's Property-Casualty Insurance Committee voted 20-5 in favor of the measure, ensuring its approval. Next it went before the Executive Committee, which unanimously approved the measure, which was sponsored by Rhode Island State Rep. Brian Kennedy (D-Hopkinton). The act would make it a felony to possess or sell a stolen airbag, or to fraudulently install or misrepresent installation of an airbag in a vehicle.

Reasons Pointing to the Need for NCOIL's Model Act

NCOIL worked for several months putting together the framework for its "Act Regarding Auto Airbag Fraud" in response to numerous reports from across the country detailing inadequate or fraudulent airbag repairs or accounts of airbags replaced incorrectly. In some cases, the airbags in a vehicle were never replaced at all following an accident [1]. The Act also aims to fight against increased rates of theft of airbag equipment out of vehicles. This equipment is very expensive to order, and thus has great potential value among unsavory individuals on the black market.

What the NCOIL's "Act Regarding Auto Airbag Fraud" Would Require

Under the provisions included in the act, there would be quite a few changes pertaining to airbag repairs that could hold repair shops much more accountable both for the work they do and for their sources of replacement equipment for vehicles being repaired. It would require body shops or other firms doing repair work involving airbags to keep records on hand including identification numbers of salvaged airbags they use in their work, and the identification numbers from which those airbags came from as well. Language included in the NCOIL model act would also require these shops to attach a label on any vehicle that has a replacement airbag in it [1].

Failure to maintain up-to-date and accurate records regarding salvaged airbags, or to properly label vehicles with replacement airbags, would become a misdemeanor in states adopting the NCOIL model act. An additional responsibility of those doing repair work including airbag replacement would be that they would have to provide vehicle owners with paperwork specifying that the replacement airbag installed in their vehicle was done correctly. Other groups would also bear increased responsibilities in certain situations. For example, police officers completing accident reports would be required to note whether a vehicle's airbags had deployed; and people selling used vehicles would have to disclose whether an airbag in any vehicle they were selling was inoperable [1].

Amendments Add Scope to NCOIL Model Act for Legislators

The Property-Casualty Committee of the National Council of Insurance Legislators passed two amendments to the "Act Regarding Auto Airbag Fraud" in response to growing concerns nationwide concerning the potentially dangerous use or misuse of unsafe salvaged airbags. The first amendment to the measure pertained to repair shops doing repair work on vehicles involving airbag repair. It would require those shops to place a permanent label on a vehicle's dashboard indicating that a salvaged airbag had been used in its repair whenever such a salvaged piece of equipment was installed [1]. This amendment would place more responsibility on repair shops to ensure that the units installed in repair jobs were functional and correctly installed. Moreover, it would keep consumers in the loop about the equipment used in the repair of their automobiles. This amendment appears to appeal to normal common sense and to business ethics integrity.

The second amendment to the NCOIL model "Act Regarding Auto Airbag Fraud" applied directly to individual states and their respective roles in shaping the course of airbag fraud legislation and prevention initiatives. This amendment said that each individual state should consider adopting protocol regarding performance criteria for salvaged airbags. It also suggested that each state appoint a regulator to utilize such protocol in making sure that such performance criteria are met by those installing airbags salvaged from other vehicles [1].

The NCOIL model act was approved on November 23, 2009, at the close of the organization's annual meeting. The hope of those who participated in debating, drafting and voting on the measure is that states will be able to more efficiently work to enact their own airbag fraud standards by leaning on the framework NCOIL's act supplies. The model act is meant to be a starting point for individual state legislatures to consider the issue on their own terms.

The National Council of Insurance Legislators is a group of state-level lawmakers with a shared interest in developing insurance legislation. The main concern of the organization as it pertains to public policy is to promote insurance legislation and industry regulation. Many of the legislators who are actively involved in NCOIL either chair or serve as members on the various committees responsible for formulating insurance legislation in their respective home states [2].

As economic conditions across the country continue to point to a prolonged slump, airbag fraud including theft and fraudulent installation will continue to be just another example of pressing problems needing the attention of legislators. People everywhere are looking to make money in any way they can, and when things get bad economically, normally honest people can also often be dragged into situations such as this. State legislators across the country will surely have their hands full in the years to come, trying to deal with the many expected and unexpected outgrowths of nationwide economic struggles. NCOIL's aggressive stance on dealing with airbag fraud and theft is a prime example of ways we can become more proactive in working to curb this sort of criminal behavior nationwide. It remains to be seen how the various individual state legislatures will respond to NCOIL's "Act Regarding Auto Airbag Fraud," but it is certain this and other fraud-related issues are not going to depart from domestic political agendas anytime soon. This much can be seen in the work slated for NCOIL's 2010 Spring Meeting in Charleston, South Carolina from March 5 to 7. Debate and action on NCOIL's proposed "Model Act Regarding Motor Vehicle Parts and Repair" was moved to the March meetings due to the lack of time necessary to address it at the meetings in New Orleans. The motor vehicle parts act is in much the same vein as the airbag fraud act, placing repair shops under the microscope and demanding much more accountability out of them in the ways they deal with consumers and go about doing their work. Whatever becomes of this measure, its existence on the agenda demonstrates the prominence of possible legislation regarding repair shop fraud and abuse. This ought to be good news for customers, who can sometimes unwittingly become the victims of unscrupulous firms taking advantage of the general public's lack of knowledge on basic and advanced auto repair techniques and standards.

[1] Retrieved 2009-12-14.
[2] Retrieved 2009-12-14.



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