Fairness requires Michigan Catastrophic Claims Association to disclose its ‘rate calculation information’
Our No Fault law is under attack. There have been several bills introduced in the Michigan Legislature that seek to make drastic changes to what No Fault PIP benefits an automobile accident victim would be entitled. Some bills would cap the necessary medical expenses, others would make changes to the Michigan Catastrophic Claims Association (MCCA), and others to what legal proofs insurers would be able to demand from people seeking benefits after a car accident.
Nearly all are sponsored by Republican lawmakers and are being pushed aggressively by lobbyists from the state’s insurance industry.
It would seem that before dramatic changes are made to the state’s No Fault laws, that it would be helpful to see the underlying numbers. Otherwise, we’re essentially just taking the word of special interests and lobbyists from the state’s powerful insurance industry. And as we saw in 1995, and again after Kriener v. Fischer, that hasn’t worked so well for the citizens of this state.
Will the Michigan Supreme Court hear the claim that the Michigan Catastrophic Claims Association should be subject to Michigan’s Freedom of Information Act – so the public can be informed of its rate calculation and financial information?
There’s an information vacuum that exists, even in the midst of the insurance industry’s push for No Fault “reform.” Yet even in the midst of this vacuum of information, there are still calls for the MCCA to be dissolved and for critical medical care and other No Fault benefits to be limited or capped.
So if the state’s high court does hear the case — from the Coalition Protecting Auto No-Fault (CPAN) and the Brain Injury Association of Michigan (BIAMI) — how will the justices rule about ordering the MCCA to disclose its assessment-rate-calculation data to the public?
Only time will tell what the answers will be.
For now, the ball is with the Michigan Supreme Court, because on August 29, 2014, CPAN and BIAMI filed their paperwork asking the high court to review the Michigan Court of Appeals decision to overrule an Ingham County judge’s order that the MCCA was bound under Michigan’s FOIA to discuss its rate calculation information.
In a December 26, 2012, order, Ingham County Circuit Court Judge Clinton Canady III 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.”
In so ruling, Judge Canady 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 …”
For more information, take a look at my previous blog post, “Judge rules that secrecy ends now for Michigan Catastrophic Claims Association.”
The MCCA appealed and, on May 20, 2014, the Michigan Court of Appeals issued a published opinion overruling Judge Canady’s order and declaring that the MCCA was exempt from Michigan’s FOIA:
The state’s open records law “unambiguously exempts ‘a record of an association or facility’ from disclosure …”
CPAN’s motion for reconsideration of the Court of Appeals decision was denied on July 22, 2014, and, on August 29, 2014, CPAN filed its application for leave to appeal to the Michigan Supreme Court.
The MCCA is a private, nonprofit association made up of a five-person board (unfortunately, comprised from the insurance industry) who manage the fund that compensates auto insurance companies when a No-Fault claim exceeds $500,000. Auto insurance consumers populate the fund by paying an MCCA assessment, which is a small part of your No Fault insurance premium.
– Photo courtesy of Creative Commons, by 401(K)2012