Michigan Assigned Claims Plan rewrites No Fault law to create hurdles for uninsured auto accident victims, while Lund’s bill seeks Legislature’s after-the-fact approval
Is Rep. Pete Lund’s (R-Macomb County) House Bill 5854 actually a “cover-up” for the Michigan Assigned Claims Plan’s (MACP) rogue rewriting of Michigan’s No Fault Law?
It sure looks that way.
Last month, I wrote about how Rep. Pete Lund (R-Macomb County) had introduced House Bill 5854, which proposed “new No Fault insurance ‘hurdles’ for the [uninsured] auto accident victims who depend on the Michigan ‘Assigned Claims Plan’ for their No Fault benefits.” To read more, check out my Michigan Auto Law blog post, “New No Fault ‘hurdles’ proposed under HB 5854.”
How wrong I was!
There was nothing “new” about the hurdles Rep. Lund was proposing.
The hurdles – undeniably unprecedented in nature – already “existed” and uninsured Michigan auto accident victims were already being forced by the Michigan Assigned Claims Plan (MACP) to leap through them. The MACP had actually created the No Fault “hurdles” all on its own by unilaterally – and without legislative approval – rewriting Michigan’s No Fault Law.
And the MACP had done so well before Rep. Lund’s September 23, 2014, introduction of HB 5854.
As it turns out, the only thing “new” in Rep. Lund’s HB 5854 was the legal legitimacy he hoped to coax after-the-fact from the Legislature for the No Fault hurdles the MACP had created in open defiance of the Michigan Legislature’s exclusive, constitutionally-granted “legislative power.” (See Article 4, Section 1 of the Michigan Constitution of 1963)
The fruits of the MACP’s power-grab (which are discussed below) are well-documented in both written testimony submitted to the Michigan House of Representatives’ Insurance Committee and in the MACP’s “Plan of Operations.”
No Fault law & the Michigan Assigned Claims Plan
Under existing No Fault law, when a pedestrian, bicyclist or other non-driver is injured in a Michigan car crash and doesn’t have access to No Fault auto insurance coverage, he “may obtain” No Fault “benefits through the assigned claims plan” so long as:
- He files a notice of claim; and,
- His claim is not “obviously ineligible.” (See MCL 500.3171; 500.3172; 500.3173a and 500.3174)
So long as those requirements are met, the “assigned claims plan” arranges for the auto accident victim’s claim for No Fault benefits to be assigned to and handled by a Michigan No Fault auto insurance company.
Rep. Lund’s House Bill 5854
In HB 5854, which was introduced in September, Lund proposed the following “new” No Fault “hurdles” that auto accident victims seeking No Fault benefits through the Michigan Assigned Claims Plan would have to clear:
- An auto accident victim seeking No Fault benefits through the “assigned claims plan” may be required to show how she has “exercise[d] due diligence” in determining that the eligibility factors apply to her claim. (Page 8 of HB 5854)
- An auto accident victim seeking No Fault benefits through the “assigned claims plan” “shall” be required to “provide a satisfactory proof of loss …” (Page 9 of HB 5854)
- An auto accident victim seeking No Fault benefits through the “assigned claims plan” “shall” be required to “cooperate in the investigation of eligibility …,” which may include submitting to “examinations under oath and examinations by physicians selected by” the auto insurance companies that run “the Michigan Automobile Insurance Placement Facility [MAIPF] …” (Page 12-13 of HB 5854)
Not so ‘new’
On May 22, 2014 – four months before Rep. Lund would introduce HB 5854 – Terri Miller of the Michigan Auto Insurance Placement Facility (MAIPF), which administers the MACP, submitted written testimony (which was dated January 24, 2014) to the Michigan House of Representatives’ Insurance Committee.
The written testimony revealed the broad outline of how the MACP had unilaterally – and without legislative approval – rewritten the No Fault law that applies to uninsured auto accident victims claiming No Fault benefits through the MACP:
“[A]pplicants must first establish that there was [an] injury sustained as a result of an auto accident. The MACP has transitioned the burden of proof to the injured party or their representative … This now includes actions like requesting that the injured parties contact their resident relatives to file claims with their auto insurance companies, requiring the injured parties to contact the involved vehicle’s owner for insurance information and insisting that the injured parties provide the necessary documentation to support that there was in a fact a motor vehicle incident. These tasks previously fell to Servicing Insurers, which led to higher administrative costs and, in some cases, unnecessary litigation.”
MACP’s ‘plan of operations’
The following provisions from the MACP’s “Plan of Operations” – which can be found on the MACP’s “File A Claim” page on its website – reveal the specific details of how the MACP has unilaterally – and without legislative approval – rewritten the No Fault law that applies to uninsured auto accident victims claiming No Fault benefits through the MACP:
- “An application for benefits under the Plan must be accompanied by a satisfactory proof of loss, documentation supporting that due diligence was exercised and the amount of loss sustained.”
- “Upon receipt of a claim for benefits, the MAIPF [which administers the MACP] may make an initial determination of the claimants’ eligibility for benefits. The claimant shall reasonably cooperate with MAIPF in the investigation of any claim, including furnishing medical records and submitting to an examination under oath.”
- “A satisfactory proof of loss may include a police report, an EMS report and/or any other documentation that the MAIPF deems satisfactory to substantiate that the claimant may be entitled to benefits through the MACP.”
- “Due diligence is exercised when the claimant or their representative has investigated and exhausted all avenues of any other available coverage. This may include, but is not limited to, contact attempt with the claimant, the claimant’s resident relatives or spouse, the involved vehicle owner(s), the involved vehicle driver and any other actions that the MAIPF deems necessary for the claimant or their representative to determine that the claimant may be entitled to benefits through the MACP.”
