Whether insurer direct repair program (DRP) requirements and guidelines should be published, and whether a single person within an insurance company should be able to control whether a particular shop is allowed to participate in that company’s DRP, were among proposed reforms discussed this summer by a panel of insurer, shop and association representatives.

Organized by the Collision Industry Conference (CIC) Fair Trade Practices Committee, the panel discussion took place at the CIC held in Scottsdale, Ariz. Panel moderator Scott Biggs of Assured Performance Network emphasized that the panelists did not necessarily write nor endorse the proposed DRP reforms, but were merely there to express their opinions of them.

Concern about what determines which shops participate in a particular DRP has some in the industry suggesting that an insurer’s decisions about which shops are selected or removed from its DRP in any market should be made by a “board of independent individuals that cannot have a close enough relationship with a shop to gain any…gratuity.” The proposed reform, Biggs said, also calls for insurers to rotate area staff so that “no single person has long-term authority over any one shop.”

The response to the proposal was mixed among the insurers on the CIC panel. Chris Evans of State Farm said as improved data helps the company make its program more performance-based than “relationship-based,” it becomes more difficult for a “rogue manager” to make decisions about a shop’s participation in the program for other reasons.

Randy Hanson, manager of Allstate’s PRO program, said that “if the structure creates a situation where there could be abuses, we’d want to look at the structure.” Hanson said Allstate redesigned its program about five years ago so that its reinspectors going into shops don’t make decisions about which shops participate in PRO.

But Michael Lloyd of California Casualty dismissed the proposal.

“I believe this isn’t going to be popular, but my opinion is that it is our business and I don’t think we should be dictated to as to how we should operate,” he said.

Dan Risley, at that time executive director of the Society of Collision Repair Specialists, said several of the proposed reforms that would make shop selection criteria and program guidelines more publicly available would eliminate some of the most common complaints he hears about DRPs from shops. Too often, he said, shops don’t know if the “moving target” DRP shops are given by the insurer are national mandates from the company or just the “flavor of the day” for a local or regional manager.

Almost all of the panelists had some concern with a proposed reform that any “increase in volume of referrals (to a shop) be based on performance.” All agreed customer choice of shop needs to be honored. Risley said participation in the program – not necessarily referrals – should be based on performance. And panelist Gary Wano of G.W. & Son Auto Body in Oklahoma City, Okla., questioned how an insurer knows the best performers in a market if the performance of shops not on that insurer’s program isn’t being tracked.

John Yoswick, a freelance writer based in Portland, Oregon, who has been writing about the automotive industry since 1988, is also the editor of the weekly CRASH Network (www.CrashNetwork.com). He can be contacted by email at jyoswick@SpiritOne.com.