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Pressure for transparency builds for Michigan Catastrophic Claims Association (MCCA)

April 25, 2013 by Steven M. Gursten

Rep. Phil Cavanagh’s HB 4551 would require public disclosure of MCCA’s rate-calculation process

The pressure for transparency into its rate-calculation process continues to build against the Michigan Catastrophic Claims Association.

On April 16, 2013, Rep. Phil Cavanagh (D-Redford Township), sponsored House Bill 4551, which proposed that the MCCA be required to comply with the Michigan Open Meetings Act and the Michigan Freedom of Information Act:

“The business that the board may perform shall be conducted at a public meeting of the board held in compliance with the Open Meetings Act …”

*    *    *

“A writing prepared, owned, used, in the possession of, or retained by the board in the performance of an official function is subject to the Freedom of Information Act …”

Cavanagh has long championed the cause of requiring transparency into the MCCA’s rate-calculation process. He has previously sponsored legislation similar to HB 4551: House Bill 6080 (2012); House Bill 6081 (2012); House Bill 4785 (2011); and House Bill 4786 (2011).

In 2012, Cavanagh turned up the heat even further on his push for MCCA transparency by introducing House Resolution 228 to “implore the Michigan Department of Treasury to conduct a financial review of the Michigan Catastrophic Claims Association (MCCA) to consider the appointment of an emergency financial manager.”

Cavanagh cited claims by No Fault reform proponents that Michigan’s “current [No Fault] law is broken and unsustainable and that insurance companies cannot maintain the level of benefits for drivers and those suffering long-term catastrophic injuries in auto accidents,” and testimony before the House Insurance Committee by the Michigan Association of Insurance Agents (MAIA) that “there is significant concern for the financial integrity of the MCCA.”

No doubt the concerns which prompted Cavanagh’s “emergency financial manager” resolution also inspired the MCCA audit requirement which he included in his recently introduced HB 4551:

“An independent certified public accountant … shall annually conduct and deliver to the Commissioner and the Senate and House of Representatives standing committees on Insurance issues an audit of the association. In conducting the audit, the appointed certified public accountant shall have access to all records of the association. Each audit required by this subsection shall include a determination of whether the association is likely to be able to continue to meet its obligations.”

Cavanagh is not alone in his push for transparency at the MCCA. On April 11, 2013, Rep. Mike Callton, R-Nashville, introduced House Bill 4543. And, earlier this year, Sen. Glenn Anderson, D-6th District, sponsored Senate Bills 102 and 103.

We applaud Representative Phil Cavanagh for his stand. He has become an important  voice for open disclosure and transparency.

Related information:

Sen. Glenn Anderson says reforming the MCCA would ‘protect drivers’ and ‘lower rates’

Senate Bills push for transparency into rate-calculation process at Michigan Catastrophic Claims Association (MCCA)

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