CPAN Praises “Fair and Affordable” Auto Insurance Reform Legislation

Proposed bills would implement cost-containment measures, create fair auto insurance rating practices and bring more transparency to Michigan’s auto insurance system

LANSING, MI – A bipartisan group of Michigan lawmakers announced today a comprehensive set of legislation aimed at improving Michigan’s no-fault auto insurance system. The legislation, which lawmakers have dubbed the “Fair and Affordable No-Fault Reform Package,” is currently in the process of being drafted and is expected to be introduced in the coming weeks.

“While we have not yet seen the final bills, this is the closest we have seen to a complete no-fault reform package in a long, long time,” said Coalition Protecting Auto No-Fault President John Cornack. “The proposals unveiled today would bring dramatic and lasting improvements to Michigan’s insurance system that all sides would benefit from. Whether you are a driver, an accident survivor, a healthcare provider or even an insurance company, there is something to like in this package.”

Earlier this year, CPAN unveiled a 24-point plan to reform Michigan’s auto insurance system. The proposals announced today incorporate many but not all of CPAN’s recommendations, including:

  • Adopt reasonable fee schedules and attendant care limits to rein in medical costs related to auto injuries;
  • Stop non-driving related factors from unfairly impacting auto insurance rates;
  • Bring transparency to the Michigan Catastrophic Claims Association by making its ratemaking data available to the public;
  • Aggressively tackle fraud and claims handling abuse by creating a state fraud authority.

Cornack was particularly enthusiastic about proposals that will tackle unfair insurance ratings practices, such as using credit scores and job titles to set auto insurance rates.

“Everyone in this state should be pleased that lawmakers are bringing fairness to auto insurance rating practices,” said Cornack. “Our research has shown that insurance companies will use every excuse imaginable to increase rates for drivers. One company even charges as much as 33 percent more to women than men for the same car, address and driving record. That is completely wrong and must be stopped.”

Legislators announcing the Fair and Affordable No-Fault Reform package included Rep. Rep. Ben Frederick (R-Owosso), Rep. Donna Lasinski (D-Scio Township), Rep. Joseph Graves (R-Argentine Township), Rep. Sherry Gay-Dagnogo (D-Detroit), Rep. Michael Webber (R-Rochester); Rep. Tim Greimel (D-Auburn Hills); Rep. Pete Lucido (R-Shelby Township); and Rep. Ed Canfield (R-Sebewaing).

“We are particularly encouraged to see Democrats and Republicans working together come up with a solution that protects accident survivors while still lowering rates across the state,” said Cornack. This sort of bipartisan approach is something that has all too often lacking when it comes to this issue.”

In addition to containing medical costs and addressing unfair rating practices, lawmakers also announced legislation to fix problems caused by two recent Michigan Supreme Court cases that have drastically harmed Michigan’s no-fault auto insurance system.

Admire vs. Auto Owners has been used by insurance companies to deny paying no-fault benefits for legitimate expenses needed by auto accident victims, including handicapped accessible transportation and even specialized food needed by patients. Lawmakers plan to introduce legislation to ensure that accident survivors will have these basic needs met.

Legislation will also be introduced to fix the disastrous court ruling Covenant Medical Center vs. State Farm, which prevents medical providers from suing insurance companies on behalf of auto accident patients when insurers refuse to pay for treatment that has been rendered. The decision puts patients squarely in the crosshairs of litigation, because health care providers will no longer be able to battle insurance companies on behalf of their patients.

“Both of these decisions were a miscarriage of justice that, if allowed to go uncorrected, posed a serious threat to Michigan’s no-fault system,” said Cornack. “We greatly appreciate the work these lawmakers have done and continue to do to bring lower rates to drivers while protecting the elements that make Michigan’s no-fault system so great.”

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Without Transparency, Michigan Catastrophic Claims Association is Taxation Without Representation

LANSING – Coalition Protecting Auto No-Fault (CPAN) President John Cornack used today’s tax filing deadline to take the Michigan Catastrophic Claims Association (MCCA) to task for practicing “taxation without representation.”

The MCCA is a private non-profit organization created by Michigan Legislature in 1978. It 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. In June, that fee rises to $170.

“Our founding fathers were adamant that there should be no taxation without representation, yet that is exactly what we have happening with the MCCA,” said Cornack. “Here we have an organization created by the Legislature that holds more than $18 BILLION of the public’s money, operating with no real public oversight. It’s a travesty.”

MCCA’s board includes AAA Insurance, Auto-Owners, Citizens Insurance, Farmers Insurance and State Farm. The Michigan director of the Department of Insurance and Financial Services serves as a non-voting ex-officio member. MCCA board meetings are not subject to the Open Meetings Act, and the organization refuses to comply with state Freedom of Information Act laws.

CPAN has filed a FOIA lawsuit seeking to open the MCCA’s rate-making data. 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 case is currently in the State Supreme Court.

In addition, legislation has been introduced in both the State House and Senate that would bring transparency to the MCCA. Senate Bills 240 and 241 would require MCCA to abide by Michigan’s Open Meetings and FOIA laws. House Bill 4354 would do the same but also require a member of the public to also sit on the MCCA board and give the State Insurance Commissioner the authority to disapprove of MCCA rate charges that are deemed excessive.

 

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Group Launched to Fight for Fair Auto Insurance Rates in Detroit

Several community leaders in Detroit joined together today to raise their voices against Detroit’s high auto insurance rates. Spearheaded by former State Rep. Brian Banks, the Detroit Alliance for Fair Auto Insurance launch included Detroit City Council President Brenda Jones, Spirit of Love Church Pastor DaRell Reed and auto accident survivor Saundra Gay.

The new organization will seek to educate Detroit residents about Michigan’s auto insurance system and empower them to be advocates for fair auto insurance reforms at the state capitol. Key issues raised at the news conference, which can be viewed on the group’s Facebook page, include the insurance company practice of using non-driving related factors like credit scores to set higher rates, and redlining in Detroit.

Ms. Gay, who was injured in a rollover accident in 2000, is quoted on the group’s news release as saying “I’m alive today and able to be a productive member of society because of the care and upport provided by Michigan’s no-fault auto insurance coverage. It’s critical that lawmakers in Lansing do everything they can to reduce rates while ensuring accident victims get the care they need.”

The Detroit Alliance for Fair Auto Insurance said it plans to hold a series of town hall discussions throughout Detroit in May where they will educate residents about their auto insurance policies and discuss ideas for lowering auto insurance rates.

CPAN is pleased to see that the organization was adamant that any changes to Michigan’s no-fault system must protect accident survivors while also lowering rates.

More information about the Detroit Alliance for Fair Auto Insurance can be found at www.DetroitFairInsurance.org.

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CPAN Praises No-Fault Transparency Legislation

LANSING – Sen. Steve Bieda (D-Warren) introduced legislation today that would bring much needed transparency to Michigan no-fault auto insurance system. The legislation, Senate Bills 240 and 241, requires the Michigan Catastrophic Claims Association (MCCA) to abide by Michigan’s Open Meetings and Freedom of Information (FOIA) acts.

In addition to Sen. Bieda’s bills, Reps. Henry Yanez (D-Sterling Heights) and Abdullah Hammoud (D-Dearborn) introduced House Bill 4354 in the State House. In addition to subjecting the MCCA to the Open Meetings Act and FOIA, his bill would require the State Insurance Commissioner to appoint a member of the public to sit on the MCCA board and empower the commissioner to disapprove of any total MCCA charge the commissioner deems excessive.

The MCCA is a fund created by the state legislature that reimburses Michigan auto insurers for personal injury claims above $555,000. The $18.8 billion fund is governed by a board of insurance industry executives who refuse to comply with state transparency laws.

In support of the legislation, CPAN spokesperson Josh Hovey issued the following statement:

“Today, more than ever, transparency is essential for a functioning democracy. We hope lawmakers from both parties will join together to support transparency and accountability for their constituents and all Michigan drivers.

“The MCCA is a critical piece of Michigan’s auto insurance system because it enables auto insurance companies to provide lifetime coverage for our state’s most seriously injured accident victims. But as a state-created organization that charges $170 on every insured vehicle in Michigan, the public expects transparency. If the insurance company executives are confident that’s a reasonable charge, they should have no problem opening up the MCCA books to public scrutiny.

CPAN has issued several Freedom of Information Act (FOIA) requests to the MCCA in an attempt to obtain the organization’s rate-making data, but those requests have been denied. CPAN and the Brain Injury Association of Michigan are currently involved in a FOIA lawsuit against the MCCA. That lawsuit is now in the Michigan Supreme Court.

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 The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, nurses and other health care providers working together to keep Michigan’s model no-fault insurance law intact. Learn more about CPAN by visiting www.ProtectNoFault.org.  


Michigan Drivers Handed Secretive $10 Auto Insurance Rate Increase

LANSING – The Coalition Protecting Auto No-Fault (CPAN) learned today that Michigan drivers will pay an additional $10 on their auto insurance premiums this year. The cost increase is the result of the insurance industry-controlled Michigan Catastrophic Claims Association (MCCA) increasing the fee charged to every Michigan auto insurance policy from $160 to $170 per vehicle.

The MCCA is a reinsurance fund created by the state legislature that helps reimburse insurers for costs of caring for catastrophic auto accident victims for any claim above $555,000. The organization, which reports holding $18.8 billion in assets, is governed by a board of insurance industry executives and is not subject to state Open Meetings or Freedom of Information laws.

In response to today’s announcement, CPAN spokesperson Josh Hovey issued the following statement:

“The MCCA is an important tool that helps ensure Michigan’s most seriously injured auto accident survivors receive the care they need. But the public has a right to know how it sets its rates. This is an organization created by our state government that is allowed to be controlled entirely by insurance companies without any transparency whatsoever. It’s unacceptable.”

CPAN has issued several Freedom of Information Act (FOIA) requests to the MCCA in an attempt to obtain the organization’s rate-making data, but those requests have been denied. CPAN and the Brain Injury Association of Michigan are currently involved in a FOIA lawsuit against the MCCA. That lawsuit is now in the Michigan Supreme Court.

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The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, nurses and other health care providers working together to keep Michigan’s model no-fault insurance law intact. Learn more about CPAN by visiting www.ProtectNoFault.org.