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What’s really motivating the campaign to change Michigan’s No Fault laws?

With hundreds of thousands of dollars flowing from the insurance industry to political leaders like the House Speaker, Majority Leader and Insurance Committee chairpersons, we must remain vigilant about preventing special interests from boosting profits at the expense of auto accident victims and the public good

Is House Speaker Tom Leonard (R-Dewitt, MI), a leading proponent of changing Michigan’s No Fault laws – and who’s taken approximately $80,000 in campaign donations from the insurance industry –  going to push No Fault insurance reform proposals that are good for auto insurance companies, but bad for drivers and car accident victims?

This same question can be asked of many other legislative leaders who’ve been on the receiving end of extremely large and generous campaign donations from the insurance industry:

  • Senate Majority Leader Arlan Meekhof (R-West Olive)($53,000 in insurance donations)
  • Joe Hune (R-Fowlervillle), Chair of the Senate Insurance Committee ($93,000 in insurance donations)
  • Lana Theis (R-Brighton), Chair of the House Insurance Committee ($19,000 in insurance donations)

We were all reminded of the need to be vigilant of politicians who are beholden to narrow special interests at the expense of the public good by the Detroit Free Press Editorial Board’s recent editorial, which posited:

  • “Want to forecast the Michigan Legislature’s priorities for the year ahead? Look first at the state’s campaign finance disclosure database.”
  • “[W]hat’s on tap for Michigan lawmakers … has a lot to do with what’s on the minds of the state’s biggest campaign financiers — interests that may or may not align with the most pressing needs of Michiganders.”

As a cautionary tale for future efforts to “reform” Michigan’s No Fault auto insurance system, the Detroit Free Press urged lawmakers to avoid supporting “dubious proposition[s]” like those offered up in the past:

  • Exchanging “the unlimited medical protections provided by Michigan’s no-fault insurance scheme” for “premiums that barely drop” is “just preposterous …”
  • “The simplest answer [to the question of “why” such a “dangerous” “trade-off” would be proposed in the first place] is “insurance company bottom lines.”

These are points that this auto law blog has repeatedly made over the last several years.

Crucially, the Detroit Free Press Editorial Board intoned:

  • Even though “the insurance industry gives a lot of money to our lawmakers,” the “primary interest [in the No Fault context] should be consumers, and the insurance industry should come second … Lawmakers need to think of their constituents more than their donors on this issue.”

Hear, hear!

Truer – and wiser –  words have rarely ever been written when it comes to understanding the driving forces of No Fault insurance reform in Michigan.

Legislative leaders with strong financial ties to the insurance industry

So why am I picking on these four: Speaker Leonard, Majority Leader Meekhof, Sen. Hune and Rep. Theis?

Because, as the legislative leaders, they’re each in a unique position to affect whether – and to what extent – the Legislature undertakes efforts to change our No Fault law.

The Detroit Free Press summed it up perfectly: “As legislative leaders, [Majority Leader] Meekhof and [House Speaker] Leonard serve as gatekeepers, in many ways choosing which bills will move forward and which will die in committee.”

Indeed, the Michigan Manual 2015-16 describes both the Majority Leader and the Speaker as having the powers to “appoint[] all committees” and “refer[] bills to committee,” adding that the Speaker “controls the order in which bills are considered.”

This is very significant because as lawmakers who have previously backed No Fault reform proposals that would have boosted auto insurance company profits by restricting benefits and protections and offering little or nothing the way of savings for consumers, both Majority Leader Meekhof and Speaker Leonard have stated that our auto No Fault law “reform” is a priority and on the agenda for both the Senate and House.

As for Sen. Hune (who has previously sponsored and backed an insurance-company-friendly No Fault reform plan) and Rep. Theis, as chairs of their Chamber’s respective Insurance Committee, they are truly “gatekeepers” for No Fault legislation because they determine what bills are “reported” out of Committee and, ultimately, what bills will make it to the “floor” for consideration by the full House and/or Senate.

Below, I will talk about the financial support these legislative leaders have received from the insurance industry.

House Speaker Leonard’s insurance industry donors

According to the Michigan Campaign Finance Network’s (MCFN) “Donor Tracking” tool, Speaker of the House (of Representatives) Tom Leonard (R-Dewitt), who formerly chaired the House Insurance Committee, counts the following insurance-related groups among his “Top Disclosed Donors … From 2011 Through Today”:

  • Blue Cross Blue Shield of Michigan PAC, $24,550
  • Automobile Club of Michigan, ACPAC, $19,500
  • Frankenmuth PAC, $16,375
  • Friends of Farmers Insurance PAC, $15,000

Other notable insurance-related donors who didn’t make the MCFN’s list of Speaker Leonard’s overall “Top Disclosed Donors” included:

  • Michigan Farm Bureau, $2,850 (“Top donors to Tom Leonard for State Representative from 2015-2016”)
  • Michigan Farm Bureau PAC, AGRI PAC, $2,250 (“Top donors to Tom Leonard for State Representative from 2013-2014”)

Senate Majority Leader Meekhof’s insurance industry campaign donations

According to the Michigan Campaign Finance Network’s (MCFN) “Donor Tracking” tool, Senate Majority Leader Arlan Meekhof (R-West Olive) counts the following insurance-related groups among his “Top Disclosed Donors … From 2011 To The Present”:

  • Blue Cross Blue Shield of Michigan, $48,000

Other notable insurance-related donors who didn’t make the MCFN’s list of Majority Leader Meekhof’s overall “Top Disclosed Donors” included:

  • Michigan Farm Bureau, $3,750 (“Top donors to Meekhof for State Senate For 2015-2016”)
  • Michigan PAC State Farm Agents, $2,000 (“Top donors to Meekhof for State Senate For 2015-2016”)

Sen. Hune’s campaign donations from the insurance industry

According to the Michigan Campaign Finance Network’s (MCFN) “Donor Tracking” tool, Sen. Joe Hune (R-Fowlerville), chair of the Senate Insurance Committee, counts the following insurance-related groups among his “Top Disclosed Donors … From 2011 Until The Present”:

  • Blue Cross Blue Shield of Michigan PAC, $62,500
  • Frankenmuth PAC, $8,000
  • Michigan Association of Insurance Agents, Agent PAC, $7,100
  • Michigan Farm Bureau PAC, AGRI PAC, $6,875

Other notable insurance-related donors who didn’t make the MCFN’s list of Sen. Hune’s overall “Top Disclosed Donors” included:

  • Friends of Farmers Insurance PAC, $4,625 (“Top donors to Joe Hune for State Senate for 2011-2014”)
  • Insurance & Financial Advisors PAC, $3,700 (“Top donors to Joe Hune for State Senate for 2011-2014”)
  • Michigan Allstate Insurance Company PAC, $1,000 (“Top donors to the Hune Leadership Fund for 2011-2014”)

Insurance industry donations Rep. Theis

According to the Michigan Campaign Finance Network’s (MCFN) “Donor Tracking” tool, Rep. Lana Theis (R-Brighton), chair of the House Insurance Committee, counts the following insurance-related groups among his “Top Disclosed Donors … From 2013 To The Present”:

  • Amerisure PAC, AmeriPAC, $9,000
  • Blue Cross Blue Shield of Michigan PAC, $4,500
  • Michigan Insurance Coalition PAC, $2,500

Other notable insurance-related donors who didn’t make the MCFN’s list of Rep. Theis’s overall “Top Disclosed Donors” included:

  • Pioneer State Mutual PAC, $1,000 (“Top donors to Lana Theis for State Rep for 2015-2016”)
  • Allstate Insurance Company PAC, $1,000 (“Top donors to Lana Theis for State Rep for 2015-2016”)
  • Frankenmuth PAC, $1,000 (“Top donors to Lana Theis for State Rep for 2015-2016”)

Beware narrow special interests who would change the law at the expense of the public good

The danger posed by these efforts at auto No Fault reform is that our auto law in Michigan is rarely understood by people – that is, until after they’ve been seriously injured in an automobile accident and need expensive medical care and treatment. I am one of the few Michigan lawyers that focuses his entire practice on our No Fault and auto insurance laws. Most lawyers in Michigan, let alone the public at large, do not understand the tremendous benefits that our No Fault law affords the public, and what a tremendous bargain our No Fault law provides Michigan citizens. Most people know that it is expensive – and it is expensive – but it also offers incredible protections that no other state provides to its citizens.  The insurance industry and the lawmakers influenced by the insurance lobby and the campaign contributions they make talk about lowering the price of our auto No Fault insurance in Michigan. What they don’t talk about is that the savings will go almost entirely to the insurance industry. There are many smart ways that we can lower the price of auto insurance without taking away the legal protections that it offers to people injured in serious motor vehicle accidents and to the public. This blog has suggested many ideas that can be implemented immediately so we can save and protect No Fault insurance and make it more affordable.

Something does need to be done about lowering the price of auto insurance.  In some cities, such as Detroit, it is estimated that half of the population is now driving without auto insurance.   This has led to massively misguided proposals by people such as Detroit Mayor Mike Duggan and his seriously flawed D-Insurance plan for Detroiters.

The answer is not to neuter the best auto insurance law in the nation, and to take away many of the legal protections and benefits it provides to consumers and auto accident victims.  The answer is to hold our lawmakers accountable and make sure they are acting on behalf of the public – not narrow special interests who would inflate already very profitable bottom lines at the public’s expense.

This entry was tagged Tags: No-Fault Insurance Blog
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Blog Author Steven M. Gursten
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