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No Fault breaking news: House Insurance Committee Republicans approve new No Fault hurdles for uninsured auto accident victims

Democrats’ efforts to remove ‘due diligence’ and ‘proof of loss’ requirements defeated; no challenge made to ‘examinations’ requirement

Michigan No Fault reform changes uninsured driversOver strong objections from Democratic lawmakers, the Republicans on the Michigan House of Representatives Insurance Committee moved forward and approved new legal hurdles for uninsured auto accident victims seeking No Fault insurance benefits, also known as PIP benefits, through the Michigan Assigned Claims Plan (MACP).

During an Insurance Committee hearing on December 3, 2014, the nine Republican members of the 15-member committee who were present voted for House Bill 5854 (also known as the “Substitute for House Bill No. 5854”) to be considered by the full House of Representatives.

Here’s a link to the “Substitute for House Bill No. 5854.”

In doing so, the Republicans shot down every one of the proposals made by the Democrats which would have left important legal protections intact for already vulnerable auto accident victims seeking help through the MACP.

The Michigan Assigned Claims Plan or MACP is an unelected organization that’s run by the for-profit auto insurance company-dominated Board of Governors of the Michigan Auto Insurance Placement Facility (MAIPF). The MACP administers a safety net of insurance coverage for No Fault benefits in situations where a person is involved in a car accident, but there is no insurance company available to provide No Fault benefits.

Why HB 5854 is bad news

As I wrote  previously, the new No Fault hurdles proposed in HB 5854 (which was introduced in September by Rep. Pete Lund (R-Macomb County)) will change the MACP eligibility rules for and, thus, adversely affect:

Pedestrians, bicyclists and other non-drivers who don’t have and don’t have access to No Fault auto insurance coverage in the event they’re injured in a Michigan car crash.

To learn more, take a look at my blog post, “New No Fault ‘hurdles’ proposed under HB 5854.”

Under existing No Fault law, an uninsured auto accident victim (like the ones I mentioned above) can apply for No Fault benefits through the MACP and have her claim assigned to a No Fault auto insurer so long as her claim is not “obviously ineligible.” (See MCL 500.3171; 500.3172; 500.3173a and 500.3174)

However, HB 5854 proposes the following changes:

  • An auto accident victim seeking No Fault benefits through the “assigned claims plan” may be required to show how she has “exercise[d] due diligence” in determining that the eligibility factors apply to her claim. (Page 8 of HB 5854; Page 11 of Substitute for House Bill 5854)
  • An auto accident victim seeking No Fault benefits through the “assigned claims plan” “shall” be required to “provide a satisfactory proof of loss …” and “the assigned claims plan must define the requirements for a satisfactory proof of loss.” (Page 9 of HB 5854; Pages 12-13 of Substitute for House Bill 5854)
  • An auto accident victim seeking No Fault benefits through the “assigned claims plan” “shall” be required to “cooperate in the investigation of eligibility …,” which may include submitting to “examinations under oath and examinations by physicians selected by” the auto insurance companies that run “the Michigan Automobile Insurance Placement Facility [MAIPF] …” (Page 12-13 of HB 5854; Page 16 of the Substitute for House Bill 5854)

Due diligence requirement

Rep. Ellen Cogen Lipton (D-Huntington Woods), joined by her Democratic colleagues, moved unsuccessfully to remove the “due diligence” requirement from HB 5854.

Proof of loss requirement

Rep. Marcia Hovey-Wright (D-Muskegon), joined by her Democratic colleagues, moved unsuccessfully to remove the “satisfactory proof of loss” requirement from HB 5854.

Examinations requirement

Strangely, no objection was made to the most absurd and least relevant of the No Fault hurdles proposed in House Bill: The requirement that auto accident victims applying for benefits through the MACP submit to “examinations under oath and examinations by physicians selected” by those who control the MACP.

The only issue relevant to the determination of whether an auto accident victim is eligible for benefits through the MACP is whether he or she has no other sources of No Fault auto insurance coverage.

The victim’s mental or physical condition is neither material nor relevant to the question of whether the victim is eligible to have his or her claim assigned to a Michigan No Fault insurer through the MACP.

Proposed clerical or administrative error provision

Rep. Hovey-Wright and Rep. Kate Segal (D-Battle Creek), joined by their Democratic colleagues, was unsuccessful in attempting to include in HB 5854 the following provision:

“The Michigan Automobile Insurance Placement Facility [which conducts eligibility determinations for the MACP] shall not deny a claim for a mere clerical or administrative error on a completed claim form.”

MACP’s exercise of ‘legislative power’

Based on the proposed notes on the Insurance Committee’s web page, it does not appear that there was any discussion of the fact that the No Fault hurdles proposed in HB 5854 have already been implemented by the MACP and are currently being applied to uninsured auto accident victims seeking benefits through the MACP.

As I’ve blogged recently, in doing so, the MACP has unilaterally rewritten – without Legislative approval and in violation of the “Legislative Power” constitutionally-granted exclusively to the Legislature – the No Fault law.

Additionally, the MACP’s unilaterally-created rules violate the No Fault rights of the auto accident victims who have sought help from the MACP.

To learn more, please check out my blog posts:

“MI Assigned Claims Plan seizes ‘legislative power’ to rewrite No Fault law”

“Is MACP violating auto accident victims’ No Fault rights?”

“Is Rep. Lund’s HB 5854 a ‘cover-up’ for the MACP’s rewriting of No Fault law?”

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