CPAN Responds to Michigan Supreme Court Refusal to Hear No-Fault Transparency Case

LANSING – Michigan Supreme Court has decided not to hear the Coalition Protecting Auto No-Fault’s case that would have shed light on the state’s auto insurance system. CPAN had sought to open the Michigan Catastrophic Claims Association’s rating practices to public scrutiny via the state’s Freedom of Information Act.

“This is a very disappointing day for those who are committed making Michigan’s auto insurance system more affordable. Every Michigan driver pays into the MCCA the only way to determine whether the rate assessments are fair and appropriate is to make the rate making data subject to Michigan’s FOIA law, said CPAN President John Cornack. “If the Michigan legislature is serious about making no-fault insurance more affordable it must begin the process of learning the facts – and that starts with transparency at the MCCA.”

The MCCA is a private non-profit organization created by Michigan Legislature in 1978. Its board is controlled entirely by insurance company representatives. The organization serves as a reinsurance fund that reimburses auto insurance companies for personal injury claims exceeding $545,000. Each Michigan driver currently is required to pay $160 annually per vehicle to fund the MCCA. At the end of June, that fee rises to $170.

CPAN’s FOIA lawsuit sought to open the MCCA’s rate-making data to gain an understanding how rates are set and how the organization’s $20 billion in assets are being managed. The Michigan Court of Appeals ruled last year that the MCCA is a “public body” as defined by Michigan law, but disagreed with CPAN’s assertion that the organization’s FOIA exemption is unconstitutional.

“The Supreme Court’s action today refuses to examine the Court of Appeals ruling. As a result, even though the MCCA is a ‘public body’ that would otherwise be subject to FOIA, it will be able to continue hiding behind this other statute which will deprive Michigan citizens’ right to access the truth,” said Cornack.

CPAN took the MCCA’s FOIA exemption to the Michigan Supreme Court, arguing that the exemption was unconstitutional because the state FOIA law itself was never amended. The Michigan Association of Broadcasters and Michigan Press Association agreed with CPAN’s argument an issued amicus briefs to the Michigan Supreme Court urging them to take up the case.

“At its core, this case was not about auto insurance but about transparency in government. It will now be much easier to the legislature to hide FOIA exemptions in other statutes, which makes it that much harder to know what is and what is not actually exempt from FOIA,” said Cornack.

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