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Raid The MCCA To Pay For Road Repairs?

March 24, 2015 by Steven M. Gursten

Rep. Pete Lucido (R-Shelby Township)
Rep. Pete Lucido (R-Shelby Township)

Rep. Pete Lucido (R-Shelby Township) Wants To Take Money Intended To Help Catastrophically Injured Car Crash Victims To Patch MI’s Pothole-Pocked Roads

Should lawmakers raid the Michigan Catastrophic Claims Association (MCCA) and use its reserves to pay to fix Michigan’s roads?

Thankfully, Gov. Rick Snyder said “No.” Unequivocally.

That’s the right decision because the monies held by the MCCA are held for one reason and one reason only:

To pay for the No Fault medical benefits of catastrophically injured auto accident victims.

The MCCA’s not in the business of making loans or giving away money to fix the problems that lawmakers’ intransigence has prevented them from fixing.

Yet, one lawmaker inexplicably thinks it’s okay to siphon off the MCCA’s money and dump it into Michigan’s bottomed-out roads budget.

I’ve heard some poorly thought-out ideas that harm Michigan auto insurance consumers and auto crash victims, but this one definitely takes the cake.

Rep. Peter J. Lucido (R-Shelby Township) told WWJ-950 Legal Analyst Charlie Langton (according to a CBS Detroit news report):

 “I’d like to take out enough money [out of the Michigan Catastrophic Claims Association fund] to make the repairs for the roads – no more taxes – and give them back the right roads that they deserve …”

According to the October 23, 2015, story, Langton reports that Rep. Lucido – who is a Michigan licensed attorney and an insurance agent – said:

  • “[T]here’s over $20 billion in the state’s catastrophic claims fund – that is just sitting there.”
  • “[T]he money in the fund is not being used for anything.”
  • “‘[I]t’s stockpiled, stockpiled, stockpiled.'”

Gov. Snyder wasn’t sold on Rep. Lucido’s plan.

According to Langton’s CBS Detroit report, the Governor explained that the money in the MCCA’s catastrophic claims fund “is stockpiled for future accident claims.”

Langton quoted Gov. Snyder as saying: “It’s not just the expenses today – it’s the future cost.”

Similarly, in an interview with Mr. Langton for Fox 2 News Detroit, Gov. Snyder said:

“Those funds are dedicated to people who are having accidents and need for their medical expenses.”

Gov. Snyder is right.

And Rep. Lucido is way wrong.

At a minimum, there are four compelling reasons why the MCCA’s funds can’t be raided by Rep. Lucido to pay to patch Michigan’s pothole-pocked roadways:

The MCCA’s money is needed – and collected for the sole purpose – of fulfilling the MCCA’s legal obligation to pay for the No Fault medical benefits of catastrophically injured auto accident victims.

  • The MCCA’s existing funds are committed to enabling the MCCA to pay for the existing and projected liabilities that the MCCA is obligated to pay.
  • The funds in the MCCA’s possession were, ultimately, paid for by Michigan auto insurance consumers, who had the reasonable and legally-based expectation that the monies would be used exclusively to pay for No Fault medical benefits in the event they were catastrophically injured in a Michigan car crash.
  • The MCCA is still running a $410 million deficit and, thus, has no extra money “just sitting there” or “‘stockpiled'” to be loaned out or given away.

For more about the MCCA’s financial condition, please check out Michigan Auto Law’s blog post “4 reasons the MCCA should lower its car insurance assessment”:

Despite Gov. Snyder’s opposition to the idea, Langton reported that Rep. Lucido “plans to introduce a bill which would ask for a public vote to take money for Michigan roads from the catastrophic claims fund.”

Let’s hope Rep. Lucido gets the message from Gov. Snyder and redirects his efforts to finding a fix for Michigan roads that doesn’t involve abandoning Michigan car accident victims on the roadside without the No Fault benefits they need – and reasonably expected.

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