With MSC refusing, yet again, to require MCCA transparency, lawmakers’ bills are last chance, proposing FOIA & Open Meeting compliance & public representation on MCCA Board
Let me say what consumer advocates and many auto accident lawyers are thinking when it comes to the Michigan Catastrophic Claims Association: We could all be getting ripped off. Increases in past years seem opportunistic and more tied to the insurance industry’s desire to reform No-Fault to further increase profit margins.
The reality is, we just don’t know.
And we will continue to not know.
Last week, the Michigan Supreme Court refused … again, for the second time … to hear the lawsuit brought by the Coalition Protecting Auto No-Fault (CPAN) and the Brain Injury Association of Michigan, which sought to use the Freedom of Information Act (FOIA) to require the MCCA to disclose information regarding its process used to set and raise its annual assessments.
Now, it’s up to lawmakers to do what the courts have, thus far, shied away from:
Shine some daylight onto the MCCA’s decisions that are proving so costly to Michigan drivers.
Transparency into the MCCA’s assessment calculation process is a huge deal because the assessments — which are used to fund the MCCA’s payment of No-Fault medical benefits for catastrophically injured car crash victims — comprise a significant amount of your car insurance bill.
Every increase in the MCCA assessment amount — which will increase $10 to $170 for the FY 2017-18 — means that consumers must pay more to drive legally in Michigan.
Couple the most recent increase in the assessment with research showing that the MCCA assessments have been approximately 15% to 26% “higher than necessary,” the need for MCCA transparency is undeniably obvious.
Thankfully, Rep. Patrick Green (D-Warren) got things off to a great start at the beginning of the legislative session with his House Bill 4049, which would require the MCCA to “disclose to the public” within 15 days of announcing a new assessment rate “all data used in computing” the assessment, such as:
- “The annual actuarial evaluation used in establishing the premium [i.e., MCCA assessment].”
- “The annual assessment reports of [Michigan auto insurance companies] used in establishing the premium [i.e., MCCA assessment].”
- “The annuity model used by the [MCCA’s] opining actuary in his or her actuarial opinion projecting future payment streams at the claimant level and the mortality adjustment applied.”
- “Any explanatory memorandum explaining the various components of the premium and the judgments made to produce the premium [i.e., MCCA assessment].”
Since Rep. Green introduced his bill on Jan. 18, 2017, other voices have joined the chorus calling for MCCA transparency.
Sen. Bieda calls for Open Meetings, FOIA & ‘public’ representation on MCCA board
In his Senate Bill 240 and his Senate Bill 241, which he introduced on March 15, 2017, Sen. Steven Bieda (D-Warren) proposed to:
- End the MCCA’s FOIA exemption. (SB 240, Page 2).
- Require that the MCCA Board (which is already heavily dominated by insurance company representatives) include “1 member representing the general public …” (SB 240, Page 10)
- Require the MCCA to comply with the Open Meetings Act and the Freedom of Information Act. (SB 240, Page 13; SB 241, Pages 1-2)
- Require an annual MCCA audit by an “independent certified public accountant.” (SB 240, Pages 13-14)
Sen. Yanez wants ‘public’ representation on MCCA board, plus transparency through Open Meetings and FOIA
In his House Bill 4354, which he introduced on March 14, 2017, Rep. Henry Yanez (D-Sterling Heights) proposed to:
- End the MCCA’s FOIA exemption. (Page 2).
- Require that the MCCA Board (which is already heavily dominated by insurance company representatives) include “1 member representing the general public …” (Page 10)
- Require the MCCA to comply with the Open Meetings Act and the Freedom of Information Act. (Page 13)
- Require an annual MCCA audit by an “independent certified public accountant.” (Pages 13-14)
The sad truth is that Michigan’s Legislature is controlled by the Republican Party and, many feel, are more beholden to the powerful insurance company lobby than they are, at least in this regard, to finding out the truth about where our taxpayer dollars are going.
As an auto accident and insurance lawyer in this state, I fear that MCCA transparency will remain a pipe dream for the foreseeable future. The insurance companies dominate the MCCA and it seems our elected officials are content with having the foxes continue to guard the henhouse.