CPAN welcomes new DIFS Director Fox, calls for new era of stronger consumer protections and regulation of insurance industry
FOIA records show former Director McPharlin was too cozy with insurance companies
LANSING, Mich.—(Jan. 14, 2019)—The Coalition Protecting Auto No-Fault today welcomed Anita Fox into her new role as director of the Department of Insurance and Financial Services, and called on her to reform the department into one that protects the interests of consumers rather than the insurance industry.
Today, Fox officially replaces outgoing director Patrick McPharlin, who had a cozy and secretive relationship with the industry he was supposed to be policing, according to records obtained by CPAN through the Freedom of Information Act.
“CPAN looks forward to working with Director Fox to make auto insurance more affordable while protecting the benefits that catastrophically injured auto accident victims need to lead productive, meaningful lives,” said John Cornack, president of CPAN. “For too long, no one has held Michigan’s insurance companies accountable. Michigan consumers need a bulldog in state government to protect them from the insurance industry’s discriminatory practices – instead, Patrick McPharlin was a lap dog for the big insurance companies.”
Documents that CPAN recently obtained through a Freedom of Information Act request relate to the DIFS “President’s Council” – a group of insurance company CEOs who regularly met with McPharlin. Only emails and meeting agendas were made available through the FOIA – no minutes of President’s Council meetings exist, although it’s clear that issues relevant to the public were discussed.
For example, an agenda item for Jan. 28, 2016 was titled “Make Michigan theinsurance industry state.” In letters sent to each insurance company CEO invited to sit on the Council, McPharlin said he wanted to hear about “laws we need to enact, repeal, or modify” to make the CEOs happy.
In a letter to State Rep. Donna Lasinski, McPharlin confirmed that the issue of tax reform was discussed at one of the President’s Council meetings. CPAN, Rep. Lasinski and other consumer advocates in the Michigan Legislature have called on DIFS to take a more proactive approach in ensuring that the insurance industry pass along to consumers the massive windfall they received as part of federal tax reform enacted in 2017. While no minutes exist from the meeting, DIFS clearly opted not to crack down on insurance companies, which have continued to rake in huge profits while jacking up prices on consumers. For example, during the first nine months of 2018, Allstate, ranked in the top 5 for market share in Michigan, increased its Adjusted Net Income by $716 million over the same time period in 2017.
Cornack noted that a recent poll commissioned by CPAN found that 65 percent of respondents said auto insurance rates are high because the State of Michigan does a poor job regulating rates to protect consumers.
“With stronger oversight from state government and a new opportunity for bipartisan solutions in the Legislature, we hope that 2019 will represent a new era—one where we put the needs of consumers above the profits of big insurance companies,” he said. “We are encouraged that we can work together to find a solution that lowers insurance premiums while protecting benefits for all Michigan drivers and families.”