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No action on Michigan No Fault insurance “reform”

July 29, 2014 by Steven M. Gursten

Proposals for changing Michigan’s auto insurance system left in limbo as lawmakers break for summer vacation


In most cases, no news is good news. Especially when we’re talking about efforts by Michigan’s auto insurance industry to dismantle Michigan’s No Fault auto insurance system. As I’ve written on the pages of this legal blog, the insurance industry in Michigan has been pushing “reform” while Republicans, who generally are more sympathetic to the insurance industry, are in the majority of the House and Senate, and with a Republican Governor to sign any legislation.

I’ve written extensively about the various insurer-sponsored plans for so-called No Fault insurance “reform.” And as an insurance attorney,  I’ve repeatedly voiced and written my  objections to these plans, which amount to little more than a boondoggle for the insurance industry in this state

Auto accident victims stand to lose considerably more than they stand to gain from so-called No Fault “reform.”

The proposals, if enacted, will take away vital and essential No Fault PIP benefits and protections from seriously injured auto accident victims. There are no meaningful and no long-term savings for auto insurance consumers.

Although my preference is that none of the No Fault “reform” proposals would have been introduced in the first place, at least I can write that as of June 12, when state lawmakers left for summer vacation, little or no action had been taken on any of the legislative proposals currently under consideration.

This is wonderful news for Michigan auto insurance consumers.  It is even better news for the seriously hurt automobile accident victims in Michigan who depend upon Michigan No Fault as a lifeline for critical medical care and treatment, as well as for the thousands of health professionals, doctors, and hospitals that provide this care.

Hopefully, the “No Action On No Fault reform” trend we’ve seen thus far will continue when the politicians come back to work on September 9.

Below are updates on the status of the various, pending proposals for so-called No Fault “reform”:

  • Since May 2013, the Michigan Legislature has taken no action on House Bill 4612, introduced by Rep. Pete Lund (R-36th District) in April 2013. Although the bill received the full-throated support of Gov. Rick Snyder at the time it was introduced, HB 4612 stalled after it was voted out by the House Insurance Committee on a 10 to 5 vote on May 7, 2013. To read more about what fair and meaningful No Fault reform would look like, please check out our blog post, “An open letter to Gov. Snyder regarding Michigan No Fault reform.”
  • The Michigan Legislature has taken no action on Senate Bill 818, introduced on  February 25, 2014 by Sen. John Pappageorge (R-13th District). To read more about Sen. Pappageorge’s bill and its provisions regarding No Fault “reasonable charges,” a medical-provider fee schedule, restrictions on in-home, family-provided attendant care and changes to the MCCA, check out our blog post, “What’s really in Sen. John Pappageorge’s SB 818 on No Fault Law Reform?”
  • Despite his media blitz last month regarding his plan for so-called No Fault “Reform,” Michigan House Speaker Jase Bolger has not introduced a bill encapsulating his plan in the Michigan House of Representatives. To read more, please check out our post, “Top 6 reasons to say ‘NO’ to House Speaker’s new No Fault ‘Reform’ plan.”
  • Neither House Speaker Jase Bolger nor House Republicans have introduced their 91-page “draft” bill for so-called No Fault “reform.” Called the “Substitute for House Bill 4612,” which was last year’s proposal for changing No Fault, the House Republicans’ draft No Fault “reform” bill was released to the public in late February. Here’s more information: “Details in the 91-page No Fault Insurance Reform Plan will truly shock you!”
  • The Michigan Legislature has taken no action on Sen. Virgil Smith (D-4th District)’s Senate Bill 251, which would eliminate No Fault’s guarantee of reasonably necessary and reasonably priced lifetime No Fault medical benefits and replace it with a $50,000 cap on No Fault medical benefits, nor has the Legislature taken action on Sen. Smith’s Senate Bill 326, which proposes a “Low Cost Automobile Insurance Pilot Program.”
  • The Michigan Legislature has taken no action on House Bill 4959, a bill sponsored by Rep. Jeff Farrington (R-30th District) (nor has the Legislature taken action on the identical bill introduced in the Senate, Senate Bill 510, by Sen. Rick Jones (R-24th District)), which makes the horrendous, reckless and dangerous proposal to exclude senior drivers over 65 from No Fault’s medical benefits provisions. For more, read our post, “Why proposed bill to exempt MI seniors from No Fault insurance is a terrible idea for elderly.”
  • The Michigan Legislature has taken no action on either the Senate or the House bills calling for transparency at the Michigan Catastrophic Claims Association (MCCA) by requiring the MCCA to comply with Michigan’s Freedom of Information Act and Michigan’s Open Meetings Act. To read more about Sen. Glenn Anderson (D-6th District)’s Senate Bill 102, please check out his guest post on the Michigan Auto Law blog, “Sen. Glenn Anderson says reforming the MCCA would ‘protect drivers’ and ‘lower rates.’”  Similarly, to read more about Rep. Phil Cavanagh (D-10th District)’s House Bill 4551, please check out Michigan Auto Law’s blog post, “Pressure for transparency builds for Michigan Catastrophic Claims Association (MCCA).”

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