IAA : New Industry Bills Look at eTitling, Used Parts, & Owner Consent

The May 2021 Legislative Update looks at the latest auto auction industry bills introduced in U.S. legislatures, as well as enacted legislation taking effect soon. New bills cover electronic processing for salvage certificates of title, definitions of used parts, and changes to a state's Unfair Claims Settlement Practices Act.

IAA, Inc. is dedicated to being pro-active when monitoring legislative and regulatory matters that affect our customers and our industry. We believe being engaged with the legislative process is critical to the auto auction industry to promote responsible business conduct and continued healthy expansion. IAA works with lobbyists, insurance companies and other industry participants towards seeing our customers' needs are met when it comes to legislative matters that may affect the industry.

New Bills

New Jersey A 5669

Introduced May 5, 2021

This bill was filed per request of IAA. It would require the Motor Vehicle Commission to establish a system for salvage processors such as IAA to electronically process applications for salvage certificates of title or certificates of ownership on behalf of insurers and to be able to print titles at the salvage processors' facilities.

IAA's Position: Support. IAA is seeking a more efficient and expeditious electronic title application process, in which IAA employees will input the information into the DMV system and will print titles at IAA's facilities. Such a process will result in a quicker title turnaround and disposition of total loss vehicles.

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Rhode Island Senate 869

Introduced May 4, 2021

This bill would define a used part and create standards for use of used parts in physically damaged motor vehicles upon the insurance company and the automobile body shop.

IAA's Position: Neutral

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Rhode Island Senate Bill 870

Introduced May 4, 2021

Would make changes to the Unfair Claims Settlement Practices Act. One of these changes pertains to owner-retained vehicle. An insurer would be required to obtain, in writing, the owner's consent and acknowledgement that the insurer is not retaining the salvage and include a statement of the owner's obligation and potential costs to dispose of or otherwise retain the salvage.

IAA's Position: Neutral

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Enacted Bills

Georgia House Bill 207

Effective July 1, 2021

This act requires insurance companies, their agents and others who apply for a salvage title to submit the certificate of title and other related forms by electronic means. In a situation where the certificate of title is unavailable, the insurance company or its agent shall submit the application for a salvage title along with evidence that the insurance company paid a total loss claim and made at least two attempts to obtain the title from the owner, by electronic means.

IAA's Position: Neutral

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Kansas Senate Bill 36

Effective date July 1, 2021

This act sets forth a process for a salvage pool to obtain a salvage or nonrepairable title for a vehicle that is in possession of a salvage pool at the request of an insurance company, the insurance claim for the vehicle has been closed without payment or denied by the insurance company, and the vehicle is abandoned at the salvage pool's facility.

This act also contains provisions related to VIN inspection and towing. Regarding towing, the act states that a person providing towing services shall not tow a vehicle to a location outside of Kansas without the consent of (i) the driver or owner of the motor vehicle; (ii) a motor club of which the driver or owner of the motor vehicle is a member; or (iii) the insurance company processing a claim with respect to the vehicle or an agent of such insurance company.

IAA's Position: Support. Senate Bill 36 was introduced on behalf of IAA. The towing provisions were included later in the bill. Per IAA's request, the sponsor of the towing bill agreed to include the provision that an insurance company processing a claim with respect to the motor vehicle, or the agent of such insurance company may consent to the out-of-state tow.

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South Carolina House Bill 3101

Effective October 25, 2021

This act sets forth a process for a salvage pool to obtain a salvage or nonrepairable title for a motor vehicle that is in possession of the salvage pool at the request of an insurance company, the insurance company subsequently denies coverage with respect to the motor vehicle or does not otherwise take ownership of the motor vehicle and the owner or lienholder abandons the vehicle at the salvage pool's facility.

IAA's Position: Support

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Virginia House Bill 1800 (Budget bill extends the favorable definition of nonrepairable vehicle until June 30, 2022)

Effective July 1, 2021

The current definition of 'nonrepairable vehicle' supported by IAA and the insurance industry was about to expire June 30, 2021. A bill was introduced per request of DMV to extend the sunset provision until June 30, 2022, however the bill died in committee. IAA engaged a lobbying firm in Virginia to help DMV get the extension of the current definition for one more year. We were successful in this effort and the current definition will remain in the code until June 30, 2022. IAA will work with DMV and others to find a permanent solution to this issue.

IAA's Position: Support. The current definition eliminates the need to provide any estimated cost of repairs with an application for a salvage certificate for most vehicles and reduces costs for insurers and therefore consumers. Returning to the prior definition of 'nonrepairable vehicle' will cause economic harm to consumers and their insurers and will place additional burdens on DMV and its customers.

View Bill (See page 565)

For more information about IAA's legislative and regulatory activities, contact:

Katerina Dotzeva
Director of Government Affairs, IAA
[e-mail]