What happens when an unelected body made up of insurance companies decides to rewrite the laws for uninsured auto accident victims
The insurance companies that make up the Michigan Assigned Claims Plan (MACP) have successfully re-written Michigan’s No Fault Law. The Assigned Claims Plan decided to change the rules that apply to uninsured auto accident victims seeking No Fault benefits through the MACP.
In doing so, they have violated Michigan law and the separation of powers, and in re-writing the law to their own advantage. The MACP did so by seizing the “legislative power” that is constitutionally reserved exclusively for Michigan’s Legislature. (“The legislative power of the State of Michigan is vested in a senate and a house of representatives.” (Article 4, Section 1 of the Michigan Constitution of 1963))
Under Michigan law, the “legislative power” – or the power to create new laws – rests exclusively with the Legislature:
- “The powers of government are divided into three branches: legislative, executive and judicial.” (Article 3, Section 2 of the Michigan Constitution of 1963)
- “The legislative power of the State of Michigan is vested in a senate and a house of representatives.” (Article 4, Section 1 of the Michigan Constitution of 1963)
- “Simply put, legislative power is the power to make laws.” (In re Complaint of Rovas against SBC Michigan, Michigan Supreme Court, 2008, #134493)
The MACP is, of course, the farthest thing from a democratically-elected legislative body. Instead, the Michigan Assigned Claims Plan is an unelected organization that’s run by the for-profit auto insurance company-dominated Board of Governors of the Michigan Auto Insurance Placement Facility (MAIPF). The MACP administers a safety net of insurance coverage for No Fault personal injury protection (also known as PIP) benefits in situations where a person is involved in a car accident, is injured, but there’s no insurance company that has priority to step in under the law.
Under Michigan’s No Fault law, an uninsured auto accident victim can get No Fault benefits through the MACP (See MCL 500.3171; 500.3172; 500.3173a and 500.3174).
However, under the MACP’s now unilaterally-created own rules that – to no one’s surprise are heavily slanted in the insurers’ favor – an uninsured auto accident victim who has been injured in a car accident now has new challenges that did not exist before. In fact, an injured accident victim must now run a gauntlet of new rules and meet new and higher burdens of proof and legal requirements if he or she hopes to collect No Fault insurance benefits.
Here’s what changed when no one was looking:
- An auto accident victim must provide a “satisfactory proof of loss” that the Michigan Auto Insurance Placement Facility (MAIPF), which is controlled by the seven for-profit auto insurers that control the MACP, “deems satisfactory to substantiate that the claimant may be entitled to benefits through the MACP.”
- An auto accident victim must prove she exercised “[d]ue diligence” in “investigat[ing] and exhaust[ing] 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.”
- An auto accident victim can be required to submit to “an examination” by an insurance company doctor “under oath.”
Again, none of these new rules enacted by the MACP – and imposed by the MACP on uninsured auto accident victims applying for No Fault benefits – exist under our current law. None of these new rules are to be found anywhere in the existing No Fault statutes.
The MACP just decided to make them up. When Rep. Lund tried to unsuccessfully tried to enact these same proposed changes through HB 5854 (see below), apparently the MACP decided it didn’t want to wait anymore for those pesky legislators to act. So the MACP decided to grab legislative authority and change the No Fault law now.
These new rules are nowhere to be found in the No Fault statutes that existed from 1973 to 2012. Nor are they to be found in the No Fault statutes after the 2012 amendments to the Assigned Claims Plan provisions.
The MACP has just pulled a legislative coup in favor of the state’s insurance companies
If I haven’t been clear up to now, let me be as clear as I can: This is very troubling. The MACP’s actions amount to an unlawful power-grab, and they violate the Michigan Constitution. This is a group of insurance companies that didn’t like the current law, and decided to write their own law instead. These insurers have acted with “legislative power” to create laws that are exclusively conferred on the Legislature by the Michigan Constitution.
And the MACP’s new laws they just legislated into being are a violation of the No Fault rights of every auto accident victim who files a claim for No Fault benefits through the MACP (Next week, I will talk more about this point).
Rep. Pete Lund proposes Legislative changes – that have already been made by the MACP
The dubious nature of the MACP’s actions is made all the more obvious by Rep. Pete Lund’s (R-Macomb County) House Bill 5854, which proposes the Legislature actually amend the No Fault law to include the requirements that the MACP has already unilaterally created.
To read more about HB 5854 relative to the MACP’s new self-imposed rules, take a look at my blog post, “Is Rep. Lund’s HB 5854 a ‘cover-up’ for the MACP’s rewriting of No Fault law?”
In particular, HB 5854 – which was introduced long after the MACP had unilaterally created and began imposing its own No Fault laws – literally begs for someone to ask the following troubling questions about the MACP’s actions:
- If the MACP’s unilaterally-created rules are lawful, then why is Rep. Lund’s HB 5854 necessary?
- If the MACP’s unilaterally-created rules are not lawful, then is HB 5854 merely Rep. Lund’s attempt to secure the Legislature’s after-the-fact approval of the MACP’s actions – the legislative version of the adage that “it’s easier to ask for forgiveness than it is permission”?
- How could the MACP, an unelected organization that’s controlled by the seven for-profit auto insurance companies (Auto-Owners Insurance Company, Farm Bureau Mutual Insurance Company, State Farm Mutual Insurance Company, Auto Club Insurance Association, Allstate Insurance Company, Amerisure Mutual Insurance Company and Citizens Insurance Company of America) on the Board of Governors of the Michigan Auto Insurance Placement Facility (MAIPF), have the power to unilaterally rewrite the No Fault law, but a duly elected member of the Michigan House of Representatives such as Rep. Lund is powerless to rewrite any portion of the No Fault law without first getting the approval of the House, the Senate and the Governor?
An open invitation to the MACP, Michigan Insurance Commissioner Flood, or Rep. Lund
If the MACP, the Insurance Commissioner (Ann Flood, Director of the Michigan Department of Insurance and Financial Services (DIFS)) or Rep. Lund will be good enough to provide answers to those important questions, I promise to post them on this legal blog.
To read more about how the MACP is no longer controlled by the duly elected Secretary of State, but instead by seven of the state’s largest, for-profit auto insurance companies, take a look at my blog post, “Michigan auto insurance companies take control over Assigned Claims Plan: a program providing No Fault PIP insurance benefits to uninsured auto accident victims.”