Insanity at the ADALB: Are the Inmates Running the Asylum?
Published in New England Automotive Report – Thomas Greco Publishing
It’s commonly said that “insanity is doing the same thing over and over again and expecting different results,” but how crazy is it to repeat the same actions and yield NO results? Yet, that’s exactly what happens at the Auto Damage Appraiser Licensing Board (ADALB) meetings time and time again!
Seated under the Division of Insurance (DOI), the ADALB is charged with the regulation of motor vehicle damage appraisers in the Commonwealth. Although the Board is charged with a laundry list of duties, the bulk of its agenda in recent years seems to be consumed with two specific responsibilities: maintaining standards for appraisers’ conduct and reviewing complaints filed against Massachusetts appraisers; however, the effectiveness of their activities is certainly worth closer scrutiny.
While the ADALB has disseminated a handful of advisory rulings, the process is arduous and circular. For example, in December 2023, Board member Bill Johnson (Pleasant Street Auto; South Hadley/Belchertown) first suggested that a notice be sent to all insurance companies and independent appraisal firms reminding them that they are allowed three days to inspect and complete the paperwork, else they’ll be subject to review by the Board. He presented a draft of an advisory ruling on the topic to the Board in March 2024.
When Johnson requested an update on the advisory ruling during the May meeting, Attorney Michael Powers warned, “It’s a whole process, and it’s going to take a while; advisory opinions don’t come back immediately. It usually takes months before you hear back.” The draft, with Powers’ edits, was finally added to the September 2024 meeting agenda, and during the Board’s discussion, Board member Peter Smith (MAPFRE) raised objections to “the language around exceptions and delays,” creating a delay of his own as he promised to provide written questions to be reviewed at the next meeting. The topic has yet to be revisited in the two meetings that have since occurred.
But that’s just a minor example of the ADALB’s ineffectiveness.
Since its meeting on January 23, 2024 – for over a year – the Board has spent a significant amount of time reviewing proposed amendments to 212 CMR 2.00 et seq, the Board’s regulation which dictates licensing requirements and standards for appraisers, duties of insurers and repairers and procedures for appraisal conduct, in addition to identifying the penalties for violations, but that doesn’t seem overly bizarre until one looks backward and realizes that previous iterations of the Board have already discussed and debated this document at length. How can a document containing less than 4,500 words take over NINE YEARS to revise?
The exhaustive review began in January 2016 (which was the first time that revision to the CMR had been considered in eight years), and the ADALB members seated at the time carefully critiqued the regulation, suggesting revisions to update language to make it relevant to the times, such as replacing “manual” with “database,” removing the word “written” in the definition of appraisal and adding definitions for Board, insurer, repair shop and repair shop appraiser.
More extensive language changes were proposed for the sections pertaining to conflicts of interest (specifically related to drive-in claims centers) and temporary licensing, but the most substantial revisions impacted 2.04(1)(e). Here, the Board stressed the importance of adhering to OEM repair procedures by proposing a change from “may” to “shall.” Additionally, verbiage was added regarding the parts used in a repair to specify “that certain parts, including but not limited to; used suspension and steering parts that contain wearable components may affect the operational safety of the vehicle” and assigning responsibility to the insurer for paying for and returning those parts; it also explicitly stated, “Costs associated with the shipping and handling or parts, including cores, shall not be considered overhead costs of the repair shop either and shall be listed on the appraisal and negotiated.”
To 2.04(1)(j), they also added “When a completed work claim form is utilized, the appraiser representing the insurer and the appraiser representing the repair shop shall negotiate all costs without regard to the direct payment plan/referral shop program.”
Ultimately, the then-seated Board cast a unanimous vote to move forward with submitting their final recommended changes for review at the DOI on October 4, 2016. (The entirety of the 2016 Board’s proposed changes can be viewed on those meeting minutes, available at bit.ly/CMRrev2016.)
…And then nothing happened for nearly half a decade.
After multiple inquiries, an update on the Board’s suggestions finally arrived on February 8, 2021 via a letter addressed to current ADALB Chairman Michael Donovan in which the Office of the Secretary of Administration and Finance (A&F) cited “administrative oversight, the transition of several attorneys […] and the extreme operational burdens” of COVID-19 as the causes for the lengthy delay. The Board was instructed to consider four key issues raised by the Division of Insurance in an allegedly-misplaced December 2016 letter, but the correspondence also indicated that since three ADALB members (both insurance representatives and the Board’s chair) had been replaced since the previous vote, it was necessary for the current ADALB to revisit the original amendments and submit updated recommendations.
Interestingly, the DOI’s objections to some of the language within the recommended changes appear to have been made at the behest of the Automobile Insurance Bureau (AIB) and Massachusetts Insurance Federation (MIF), which contended that the “ADALB lacks the statutory authority to regulate the claims handling procedures of insurers as that is the responsibility of the DOI. The Division agrees with both the AIB’s and MIF’s comments in this regard and does not recommend the proposed changes,” the letter stated.
In response, then-Board member Rick Starbard (Rick’s Auto Collision; Revere) made an astute observation that clearly demonstrated where the DOI’s loyalties lie: “The DOI’s comments continually reference the MIF and the AIB, but nowhere in here do they reference SCRS, AASP, I-CAR or anyone that actually fixes or manufactures vehicles. The only people that seem to have had any input into this are the people who pay to repair the cars, not anyone who has anything to do with making or repairing them.
“If we go through that process again, we could have another Board by the time this thing actually gets voted on and then have it kicked again,” Starbard unwittingly foretold the future. “Are we going to be 10 years out before anything gets done?”
And thus the hashing out of minutiae and arguments about semantics began anew with discussions rife with contention, disputes and “compromises” during the second review. Although the group originally agreed to simply review and resolve the DOI’s four questions, when a consensus was reached on that regard, Smith and then-Board member Samantha Tracy (Arbella Insurance) issued a series of questions and concerns related to the proposed changes, thus essentials sending the Board back to the drawing board.
Similar decisions were made throughout the process, although the conflict of interest verbiage regarding drive-in claims centers and the addition to the completed work claim form were removed.
Additionally, the language surrounding payment for used parts was tweaked to only require payment by the insurer “when an insurance company specifies the use of used, rebuilt or aftermarket parts, in keeping with the provisions of 211 CMR 133.04 and these parts are later determined by both parties to be unfit for the use in the repair,” also adding the caveat “unless the repair shop is responsible for the part(s) being unfit.”
During the 15-month review period, those small changes added up to a big difference, causing AASP/MA Executive Director Lucky Papageorg to exclaim, “You’ve taken the teeth out of what was a decently written piece of regulation. It had to have the ambiguity taken out, but you’ve gutted it!”
Notably, the 2022 Board’s proposal included an increase in the claim amount up to which an insurer could exclude a claim from requiring an appraisal, raising the amount from $1,500 to $2,500 via 2.04(1)(a), a move discussed by the 2016 Board who could never reach a consensus on a reasonable amount. These debates lasted from May 2021 until July 2022 when a three-to-one vote allowed the Board to submit. (The entirety of the 2022 Board’s proposed changes can be viewed on those meeting minutes, available at
bit.ly/CMRrev2022.)
“This thing has been hanging around long enough. Isn’t five years long enough to delay the process?” Johnson asked during the process. Apparently not!
Although a year passed without a response from the DOI regarding the proposed amendments, the replacement of two Board members elicited an update at the second meeting in which Board members Carl Garcia (Carl’s Collision Center; Fall River) and Vicky Wei Ye (Bos Insurance Agency) replaced Starbard and Tracy. General Counsel for the DOI was quick to inform Attorney Powers that the ADALB’s past efforts were merely an exercise in futility.
This never-ending song and dance would be enough to drive anyone mad, and the timing of the DOI’s feedback seems less-than coincidental, as Johnson observed upon learning that the ADALB would need to go back to the drawing board: “This is the third time the Board is reviewing these proposed amendments, and each time we approve them and submit them to Administration and Finance, we never receive a response until the composition of the Board changes again. I don’t know if that’s by design or if that’s just a coincidence, but by my recollection, there really isn’t anything earth shattering in these CMRs; they were just more of a reflection of changing with the times and upgrading definitions.”
While the largest portion of the current Board’s time has been spent revisiting the definitions thus far, it’s worth noting that, at the most recent ADALB meeting in January, Johnson objected to Smith’s suggestion to strike 2.02(8) which indicates that an appraiser’s license can be suspended or revoked for “failure to comply with 212 CMR 2.00.” Although Smith indicated that it’s simply stating the obvious, Johnson agreed, “It’s 100 percent restating the obvious, but I think we need to keep restating the obvious. That’s why we’re here. We wouldn’t need this Board if everyone followed the rules.”
Will the third time be the charm for Regulation 212 CMR 2.00 et seq? Perhaps, but all the time spent reviewing the proposed amendments ad nauseam is nonsensical if the ADALB refuses to actually enforce the standards it is meant to uphold in the first place! Its handling of complaints suggests that this review may be a moot point – even if the DOI ever actually approves the Board’s suggested revisions.
Stay tuned to next month’s New England Automotive Report as we continue our analysis of the ADALB’s actions (and lack thereof) through their complaint handling process.
