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Brain Injury Association of Michigan sues Michigan Catastrophic Claims Association (MCCA)

June 25, 2012 by Steven M. Gursten

Brain Injury Association demands financial records and claim information after insurance companies hike fees by more than 20 percent, coinciding with No-Fault “reform” push by insurance industry

Something is rotten in Denmark, and the Michigan Brain Injury Association wants to investigate.
The Michigan Brain Injury Association (MBIA), is suing the Michigan Catastrophic Claims Association (MCCA). This lawsuit comes after a huge rate hike, which is very suspect, as it coincides with a huge push by the insurance industry to dismantle Michigan No-Fault and cap medical benefits. Many observers feel the rate hike is strongly connected with a political agenda, and not with a need to increase fees for the MCCA.

The MBIA is an organization that advocates for people with traumatic brain injury. Auto accidents make up the second highest cause of brain injury. The connection with the MCCA is that the MCCA provides medical benefits for people who sustain catastrophic injuries in auto accidents after their medical treatment exceeds $500,000. It recently announced a 21 percent increase in its annual per vehicle assessment.

The Michigan Brain Injury Association wants more information from the MCCA, given recent claims from the insurance industry that our No-Fault insurance system is unsustainable and the MCCA will go bankrupt without current No-Fault “reform” measures.

According to a June 20, 2012 press release by the Michigan BIA:

“The Brain Injury Association of Michigan (BIAMI) today filed a lawsuit against the Michigan Catastrophic Claims Association (MCCA) to obtain vital financial information, specific claimant records and actuarial standards under the principles of Michigan’s common law on behalf of all auto-insured citizens and all catastrophically-injured survivors across the state. The information is critical in revealing to Michigan citizens and Lansing lawmakers the rationale behind the insurance industry’s claims that Michigan’s current auto no-fault system is financially unsustainable and that the MCCA will soon go bankrupt without capping benefits and enforcing strict cost controls.

To date, the MCCA has continued to assert its claim of exemption from all attempts to secure this essential information – including the recently-filed FOIA lawsuit by the Coalition to Protect Auto No-Fault (CPAN) – effectively blocking the ability of all concerned parties to assess the no-fault system, address its shortfalls, and collaborate on appropriate solutions to fix the system without sacrificing no-fault’s core principle of immediate access to appropriate, unlimited care for catastrophically-injured victims.”

Here’s the complaint: Brain Injury Association of Michigan et al. v. The Michigan Catastrophic Claims Association

The MBIA certainly has a right to know this information, as the organization helps traumatic brain injury victims — many who are in car accidents and need assistance from the MCCA due to their debilitating injuries.

This is the second lawsuit against the MCCA. In February, the Coalition Protecting Auto No-Fault (CPAN) brought a lawsuit against the MCCA. CPAN says that a law that created the MCCA improperly left out information about how much it is paying out on catastrophic personal injury claims from auto accidents in Michigan.

Along the same lines as the MBIA lawsuit, CPAN officials said that money paid into the MCCA fund is the public’s money, and that information related to the cost of claims is needed so legislators can make informed decisions before voting on stripping away vital protections (such as capping No-Fault medical benefits and attendant care) as part of No-Fault “reform.”

As I’ve said before, we must take a good look at how our current system is working before we rob Michigan drivers of the best auto insurance protections in the entire nation – especially when Michigan insurance companies already lead the nation in profitability.

It’s clear that the insurance industry’s efforts to cap medical benefits and attendant care benefits to auto accident victims with traumatic brain injuries and spinal cord injuries are good for the insurance companies. Hopefully this lawsuit and the information it discovers will show whether it also makes sense for Michigan taxpayers, especially as the only alternative is pushing these catastrophically injured people onto Medicaid and leaving taxpayers footing the bill.

– Steve Gursten is head of Michigan Auto Law. He is president of the Motor Vehicle Trial Lawyers Association and past co-chair of the Michigan Association for Justice Automobile Accident No-Fault Committee. He frequently writes and speaks about Michigan No-Fault law, and is available for comment.

Related information:

How much money is really in the Michigan Catastrophic Claims fund?

Michigan Auto Law is the largest law firm exclusively handling car accident, truck accident and motorcycle accident cases throughout the entire state. We have offices in Farmington Hills, Detroit, Ann Arbor, Grand Rapids and Sterling Heights. Call (248) 353-7575 to speak with one of our lawyers.

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