WASHINGTON, June 26 -- The American Insurance Association issued the following news release:

Gary Henning, Northeast region vice president for the American Insurance Association (AIA), issued a statement on Rhode Island Gov. Lincoln Chafee's (I) veto of H. 7782A, adverse auto body legislation. H. 7782A would have allowed for nationally unprecedented private rights of action for auto body shops directly against insurers if they did not agree to pay a body shop's non-negotiable labor rate. In addition, under the bill, Rhode Island policyholders would have been stripped of the option of "totaling" a vehicle and accepting a check for its value if the cost to rebuild the car was less than 75% of its value.

Mr. Henning's statement follows:

"AIA commends Gov. Chafee for vetoing H. 7782A, legislation which represented poor public policy that would have led to an explosion of litigation. No other state in the nation allows auto body shops to set non-negotiable rates and attempt to force them on third party payers under threat of litigation. Rhode Island is already one of the most expensive states in the nation for auto body repair and this bill would have made the problem even worse.

"Governor Chafee stood with consumers by taking a stand against this bill. The governor's veto protects policyholders from increased repair costs and increased litigation."

The American Insurance Association (AIA) is the leading property-casualty insurance trade organization, representing approximately 300 insurers that write more than $100 billion in premiums each year. AIA member companies offer all types of property - casualty insurance, including personal and commercial auto insurance, commercial property and liability coverage for small businesses, workers' compensation, homeowners' insurance, medical malpractice coverage, and product liability insurance.

TNS LE-120627-JF78-3927470 StaffFurigay