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Breaking NEWS: Michigan Court of Appeals says MCCA doesn’t have to show how car insurance rates are calculated

Ruling states Michigan Catastrophic Claims Association is exempt from FOIA requests

Michigan Catastrophic Claim Association

Well, it looks like Michigan drivers will remain in the dark on how their car insurance rates are calculated by the Michigan Catastrophic Claims Association (MCCA).

The  Michigan Court of Appeals recently ruled in a lawsuit that the MCCA is exempt from the Freedom of Information Act (FOIA) and therefore, doesn’t have to show its numbers to the inquiring – and paying – public.

The MCCA is a private, nonprofit association made up of a five-person board (unfortunately, comprised from the insurance industry) who manage the fund that reimburses auto insurance companies for No Fault medical claims that exceed $530,000.

Auto insurance consumers pay an assessment that funds the MCCA. Currently, Michigan drivers pay an annual fee of $186 per vehicle.

The Coalition Protecting Auto No Fault (CPAN) and the Brain Injury Association of Michigan filed a FOIA lawsuit in 2012 against the MCCA, trying to get the actuarial data and economic assumptions used to set the assessment rate.

CPAN – as well as accident victims, hospitals, physicians and injury attorneys – have been trying to access the records because the auto insurance industry is claiming the MCCA fund is unsustainable, thus the need to “reform” Michigan’s entire No Fault system.

But in the unanimous ruling, Appeals Court Judges Stephen L. Borrello, Donald S. Owens and Elizabeth L. Gleicher concluded state’s open records law “unambiguously exempts ‘a record of an association or facility’ from disclosure,” overturning Ingham County Judge Clinton Canady III’s earlier ruling that the MCCA has to open its records to the public.

Michigan has had some of the highest auto insurance rates in the country. One of the causes is the annual per-vehicle assessment rate charged by the MCCA.  These charges (and large hikes in charges in years such as 21% in 2012), have been made in total secrecy.

The Michigan driving-public who must pay into the MCCA have the right to learn the facts.

Yet the facts remain cloaked in secrecy thanks to this Court of Appeals decision, and as many Republican lawmakers attempt to dismantle our nearly 40-year-old No Fault insurance system.

Under several No Fault reform proposals, life saving medical benefits would be cut for auto accident victims, as well as other invaluable No Fault benefits, meanwhile a boon to the insurance industry. For more information, take a look at our Michigan No Fault insurance reform center.

As I told Michigan Lawyers Weekly, the public has a right to know this information if we’re required to fund the MCCA:

“…  there should not be a total information blackout. It’s not the CIA. … We have every right to at least have public disclosure of their finances to see where the money’s going.”


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Blog Author Steven M. Gursten
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