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Judge rules that secrecy ends now for Michigan Catastrophic Claims Association

March 22, 2013 by Steven M. Gursten

In lawsuit by CPAN and Brain Injury Association Of Michigan, Ingham County Circuit Court judge denies MCCA’s request for stay pending its appeal

We already know that the Michigan Catastrophic Claims Association (MCCA) is covering claims payouts and potentially amassing billions in reserves.

And now, thanks to an Ingham County Circuit Court Judge ruling,  the MCCA cannot delay any longer its compliance with a Freedom of Information Act request from the Coalition Protecting Auto No-Fault (CPAN) and the Brain Injury Association of Michigan (BIA of Michigan) for information about the “MCCA’s rate calculation” process.

Judge Clinton Canady III denied the MCCA’s motion to postpone compliance until the Michigan Court of Appeals decides the MCCA’s appeal from the judge’s previous ruling that the MCCA is subject to and not exempt from the disclosure requirements of the Michigan Freedom of Information Act.

In his December 26, 2012, written opinion in CPAN and BIAMI v. MCCA, Judge Canady made the following significant conclusions:

“Because the MCCA rate charged to insurers is passed on to the insured individuals as part of the premium they pay, it is reasonable to conclude that citizens essentially fund the MCCA reserves by paying that premium; thus, individual citizens have a financial interest in the rate calculation process and how it is conducted.”

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“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 the insurers.”

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Ultimately, in December 26, 2012, written opinion, Judge Canady ordered that the MCCA must comply with CPAN’s and BIAMI’s FOIA request for “certain records regarding the payment of allowable expense [PIP] benefits on behalf of catastrophically injured victims.”

Accordingly, he directed the MCCA to produce:

“[G]eneral rate calculation information such as amount of funds contained in MCCA reserves, number of claimants, administrative costs, nature and type of investments of the reserves, amount currently paid by insurers and specific accounting as to increase/decrease in yearly rate calculated …”

CPAN President John Cornack praised Judge Canady’s ruling as “win for consumers, lawmakers and all drivers in the state of Michigan,” according to a March 1, 2013, press release. He added:

“Insurance companies have been pushing for significant changes to our state’s no-fault system on the premise that the MCCA is facing a deficit. All we’re asking is for the MCCA to show the public and lawmakers the math that justifies the cuts they are proposing. Otherwise, legislators are being asked to vote on significant changes to Michigan’s no-fault system without the information needed to make an informed decision.”

For more information, click here to read a comprehensive analysis of Michigan No Fault reform and the latest developments.

Related Information:

What’s the truth about the Michigan Catastrophic Claims Association’s claimed billion-dollar deficit?

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