CPAN joins bipartisan lawmakers in calling on state government to crack down on insurance industry’s refusal to lower rates in light of corporate tax reform

CPAN joins bipartisan lawmakers in calling on state government to crack down on insurance industry’s refusal to lower rates in light of corporate tax reform

Lawmakers question why corporate savings not passed down to consumers

LANSING – The Coalition Protecting Auto No-Fault today joined with a bipartisan group of Michigan legislators calling on the state Department of Insurance and Financial Services (DIFS) to ensure that insurance companies pass along the savings they received from the federal tax reform enacted last December.

CPAN President John Cornack expressed his support for a letter sent to DIFS Director Patrick McPharlin, submitted by State Rep. Donna Lasinski and co-signed by several Michigan legislators. The letter notes that “if insurers have not adjusted their rates to account for the lower tax, their rates likely became excessive, leaving Michigan residents overpaying for auto, home, and renters coverage they need.”

“Rep. Lasinski is absolutely correct – the insurance industry received a massive tax break as part of federal tax reform, but instead of passing that relief onto consumers, it appears that they’ve once again opted to line their own pockets,” Cornack said. “For too long, state government has looked the other way while the insurance industry has bled residents dry. It’s time for DIFS to stand up to insurers and protect Michigan consumers. All lawmakers fighting to lower auto insurance rates for Michigan drivers should be compelling DIFS to take action.”

In January 2018, the Consumer Federation of America (CFA) sent a letter to McPharlin and state insurance commissioners throughout the country, asking what actions the industry would be taking to reduce rates to reflect the windfall from tax changes and to ensure rates return to reasonable levels.

In her follow-up letter to Director McPharlin, Rep. Lasinski writes: “As we understand it, neither you nor your staff responded to CFA’s query. More important than your lack of response to the CFA, however, is the apparent lack of response to the underlying problem. We are not aware of any systematic DIFS effort to ensure that insurance companies have appropriately reduced their rates in response to changes in federal tax law.”

Instead, insurance companies continue to rake in huge profits while jacking up prices on consumers. 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, which, Allstate explains, was “driven by higher premiums earned, lower catastrophe losses and a lower effective tax rate…” Meanwhile, Allstate customers saw a total premium increase of $331 million between January 2018 and September 2018 alone.

Douglas Heller, an insurance industry expert who has worked with CPAN to uncover the insurance industry’s discriminatory practice of using factors like gender, job title and ZIP code when setting rates in Michigan, said that the profit provision of an insurance rate filing incorporates anticipated taxes, so the corporate tax cut would allow for a lower rate filing while providing insurers with the same rate of return. Heller noted that earlier this year the California Insurance Commissioner directed his Department’s staff “to commence a regulatory review of these insurers’ rates given the major tax windfall under the new federal tax rules” and also issued a notice to all insurers stating that “any insurer with excessive rates, whether in whole or in part due to…changes to the federal income tax rates or due to any other reason, must file a rate change application with the Department to seek an appropriate insurance rate reduction.”

“Consumers Energy and DTE along with many utilities—another regulated industry—announced plans to cut rates due to their tax reform windfall, and insurance companies should be doing the same,” Heller said. “Michigan’s lack of effective oversight of these insurance companies is the main driver of the too-high auto insurance rates paid by policyholders. Requiring stronger regulation is the best way to provide relief to consumers.”

 


New poll reveals majority of Michigan residents support protecting auto no- fault benefits, cracking down on insurance companies’ discriminatory practices

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New poll reveals majority of Michigan residents support protecting auto no- fault benefits, cracking down on insurance companies’ discriminatory practices

Survey also finds support for bipartisan Fair and Affordable no-fault reform package, which remains largely neglected in the Michigan Legislature

GROSSE POINTE, Mich. — Two-thirds of Michigan residents support a package of bills in the Michigan Legislature that seeks to lower auto insurance premiums while protecting the lifetime medical and lost-wage benefits provided by the state’s auto no-fault insurance system, according to a new statewide poll conducted by ROI Insight.

The poll showed strong support for the benefits provided by the no-fault system. Sixty-five percent of likely voters (56 percent strongly) reject any plan to eliminate or limit medical benefits for auto accident victims. Meanwhile, 56 percent believe rates should not be slashed at the expense of accident victims.

In addition, 77 percent of respondents said they do not believe insurance companies when they say they want to save them money, and 65 percent of respondents said rates are high because the State of Michigan does a poor job regulating rates to protect consumers.

“Voters strongly want to protect the lifetime medical benefits and limited lost wage benefits that no-fault provides,” said Paul King, president of ROI Insight. “When voters discuss the protections provided by the no-fault system, the polling data show their perceptions are significantly positive. In fact, nearly three-quarters of voters say no-fault’s protections of lifetime medical benefits to accident victims are good things, with a plurality saying ‘very good.’”

The statewide survey of 800 likely voters, which was conducted by live callers between Sept. 15 and 20, included a 30-percent mix of cell phone users. The margin of error was +/-3.46. The survey was commissioned by CPAN (Coalition Protecting Auto No-Fault), a coalition of consumer groups and care providers working in a bipartisan way to reduce premiums while protecting Michigan drivers and families.

The bipartisan Fair and Affordable package of bills, which has sat in the Michigan Legislature for over a year without receiving a hearing, includes bills which would end the insurance industry’s discriminatory practices of using non-driving rating factors like gender and ZIP code when setting rates; require more transparency in how rates are set; crack down on fraud by insurance companies, consumers and medical providers; and lower health care costs by establishing a fee schedule for medical providers.

This survey shows that the Fair and Affordable package is supported by 66 percent of likely Michigan voters.

 

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View the full version of the release here.

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About ROI Insight

ROI Insight was founded by Paul King, an award-winning researcher and strategist with more than 25 years in the market research and public opinion polling field. Based in Grosse Pointe, Mich., ROI Insight helps clients measure and influence public opinions and audience motivators by providing research and consulting services to stakeholders across various business sectors as well as the non-profit and public affairs vertical markets.

 


CPAN earns awards for excellence from Michigan Society of Association Executives (MSAE)

CPAN earns awards for excellence from Michigan Society of Association Executives (MSAE)

Lansing – The Coalition Protecting Auto No-Fault (CPAN) earned multiple honors as the Michigan Society of Association Executives (MSAE) saluted the innovation of program winners at its 17th annual Diamond Awards event Sept. 20th in Novi.

In the “Public Relations Campaign” category, CPAN received a Diamond Award for its campaign “Non-driving Rating Factors: Game Changer in No-Fault Battle” (Less than $1 million budget category). In the “Social Media Campaign” category, CPAN earned a Diamond Award for its campaign “Michigan Drivers Save with Shop Your Policy” (less than $1 million budget).

“We’re enormously proud of the work CPAN has done over the past year to protect benefits for victims of catastrophic automobile accidents while helping consumers secure lower auto insurance premiums,” said Martha Levandowski, administrative director of CPAN. “These awards are a testament to the dedication and hard work of our team, which is so passionate about what we do. We look forward to continuing to advocate for Michigan drivers and families.”

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CPAN is a broad coalition of health care providers, patient advocates and accident survivors who are committed to preserving Michigan’s model auto no-fault insurance system. For more information, please visit www.ProtectNoFault.org.

MSAE, based in East Lansing, is a professional organization of more than 1,600 members that works to advance knowledge in the association industry.  More than 300 association professionals gathered Sept. 20th at Suburban Collection Showplace in Novi to recognize leaders and program excellence.


CPAN Statement: Duggan lawsuit against State of Michigan points blame in the wrong direction, won’t guarantee lower auto insurance premiums

Cornack: Action needed to hold insurance companies accountable

Lansing — Today, Detroit Mayor Mike Duggan announced a lawsuit against the State of Michigan with a political aim of dismantling Michigan’s auto no-fault system, which would adversely affect citizens across Michigan. Coalition Protecting Auto No-Fault (CPAN) President John Cornack issued the following statement in response to the proposed lawsuit:

“Instead of holding insurance companies accountable for their discriminatory rate-setting practices and sky-high premiums, Mayor Duggan is once again blaming a law that has been a lifesaver for thousands of Michigan families over the last five decades.

“While we have not had the opportunity to review and analyze this filing, this issue of affordability and auto insurance is critical because it impacts every Michigan citizen. CPAN is deeply concerned about the lawsuit that aims to make sweeping and potentially devastating changes to Michigan’s auto no-fault law, a move that will allow insurance companies to sell worse plans with no guaranteed reduction in rates. This lawsuit is primarily a political stunt. Our courts are not charged with writing legislation, but upholding the law.

“CPAN agrees that under the landmark Michigan Supreme Court decision in Shavers v Attorney General that Michigan citizens have a constitutional right to fair and equitable auto insurance rates. However, we believe the proper remedy when that right is being violated is to enact legislation forcing insurance companies to utilize fair and equitable rate making procedures so that premiums are affordable for all Michigan citizens. The bipartisan, Fair and Affordable package of bills that will lower rates without threatening benefits, has been introduced in the Michigan Legislature. This bill package is stalled and has yet to receive consideration by House Committee Chair, Rep Lana Theis nor the House Leadership.It’s time to pass this package of bills and hold the insurance companies accountable.”

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The Coalition Protecting Auto No-Fault (CPAN) is a broad-based coalition of organizations representing consumer advocacy groups and health care professionals of all political persuasions. These organizations are united to preserve Michigan’s model no-fault auto insurance system and to make sure that the Michigan auto insurance industry kept the original no-fault promise it made to Michigan citizens when the No-Fault Act was passed in 1972.