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Michigan Catastrophic Claims Association (MCCA) must comply with Freedom Of Information Act

January 3, 2013 by Steven M. Gursten

Ingham County Circuit Court ruling provides opportunity to finally learn the truth  about auto insurance prices

MCCA must comply with FOIAMichigan has had some of the highest auto insurance rates in the country for several years.

And one of the causes of these high rates is the annual per-vehicle assessment rate charged by the Michigan Catastrophic Claims Association (MCCA).  These charges, and substantial increases in charges in years such as in 2012, have been made in total secrecy.  No information has been provided about how much money the MCCA has.

Until now.

Now, at long last, the Michigan driving-public who must pay into the Michigan Catastrophic Claims Association will finally have the right to learn the facts, data, information and assumptions used by the MCCA in setting and increasing No-Fault insurance rates.

In a ruling by Ingham County Circuit Court Judge Clinton Canady III, the MCCA was told that it must comply with the public disclosure requirements set forth in Michigan’s Freedom of Information Act (FOIA) and, thus, “disclose [its] general rate calculation information,” according to an MLive article by Melissa Anders.

Canady wrote:

“…Michigan citizens have a right to know how the MCCA rate charged to insurers is calculated, because citizens ultimately end up paying that rate as part of the premium charged by insurers …”

The ruling came in a lawsuit filed jointly by the Brain Injury Association of Michigan and the Coalition Protecting Auto No-Fault (CPAN).

My friend and CPAN President John Cornack praised the ruling for “requir[ing] the fund to publicly disclose how it calculates the assessment charged to every Michigan vehicle when drivers purchase or renew their auto insurance,” according to a press release on the CPAN website.

Cornack added:

“If you insure a car in Michigan you are paying into the MCCA … It’s plain and simple; this is the public’s money and the public has a right to know all the facts about how their money is managed and whether what they pay in premiums is adequate to handle future claims.”

Brain Injury Association of Michigan President Michael Dabbs agreed with Cornack. In the CPAN press release, Dabbs explained that by requiring the MCCA to comply with FOIA, Michigan drivers will finally have a “way to verify whether [they] were being charged appropriate rates to sustain the MCCA or whether Michigan insurance companies were properly managing the more than $13 billion held in MCCA funds.”

According to the CPAN press release:

“The MCCA is a reinsurance fund created by the state legislature in 1978. Each Michigan driver is required to pay $175 annually per vehicle to fund the MCCA, which helps reimburse insurers for costs above $500,000 for the care and treatment of seriously injured auto accident survivors. The MCCA assessment has increased each year since 2000. About 13,000 accident survivors are provided care through MCCA reimbursements. … The MCCA is controlled by a five-member board, made up entirely of insurance companies, whose meetings are closed to the public. The Michigan Insurance Commissioner also sits on the board but is not allowed a vote.”

Related information:

What’s the truth about the MCCA’s claimed billion-dollar deficit?

Your Michigan No-Fault insurance rights



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