DIFS Bulletin Struck Down by Michigan Court of Claims Represents Big Win for Thousands of Crash Survivors
LANSING, Mich.—(Feb. 25, 2025)—On February 21, 2025, the Michigan Court of Claims issued an important ruling regarding the 2019 Auto No-Fault Reform Legislation. The decision, by Judge Christopher Yates, ruled that the Michigan Department of Insurance and Financial Services (DIFS) had incorrectly interpreted the Michigan Supreme Court’s 2023 landmark decision in the case of Andary v USAA.
In the Andary case, the Supreme Court ruled that two fee schedule provisions contained in the 2019 No-Fault Reform Legislation reducing insurance benefits, could not be retroactively applied to accident victims injured prior to the passage of the new law. In a strongly worded opinion from the bench, Judge Yates ruled that DIFS was clearly wrong in its conclusion that Andary did not apply to all of the fee schedule reductions contained in the 2019 legislation. Specifically, the Court found that the analysis and rationale set forth in the Andary decision made it very clear that none of the fee schedule limitations in the 2019 reforms can be applied retroactively to the claims of people injured before the law changed and, therefore, DIFS’s attempts to limit the Andary ruling to only the two provisions at issue in Andary, was completely unfounded.
“It is perplexing and indeed troubling why DIFS would attempt to dilute the protections of the Andary case for that large population of patients,” said Tim Hoste, President of CPAN. “DIFS has proven time and again that they care more about insurance company profits than the consumers they are supposed to protect. Fortunately, DIFS’ efforts were soundly rejected by the Michigan Court of Claims, and as a result, some of the stability created by the Supreme Court’s decision in Andary has been restored. That is a big relief for thousands of catastrophically injured accident victims throughout Michigan.”
The DIFS bulletin at issue in the Court of Claims case (Bulletin 2024-06-INS) had created considerable confusion among many Michigan Auto No-Fault insurers who had correctly interpreted the Andary decision to prohibit the retroactive application of any of the benefit reductions contained in the 2019 no-fault legislation. As a result of that interpretation, no victim injured before the new law took effect would suffer any reduction in benefits. In response to those insurers, DIFS threatened legal action if any insurance company refused to retroactively apply all of the benefit reductions contained in the new law. Consequently, 13 insurers filed a lawsuit against DIFS in the Michigan Court of Claims seeking a declaration that DIFS’ interpretation of the Andary decision was incorrect.
Shortly after the insurers sued DIFS, CPAN quickly sought to have its voice heard by asking the Court of Claims for permission to participate in this case as an amicus curiae (Friend of the Court). CPAN’s request for amicus status was quickly granted by the Court. Shortly thereafter, CPAN filed a very thorough and comprehensive amicus brief prepared by CPAN’s general counsel, George T. Sinas and his colleague Joel T. Finnell of the Sinas Dramis Law Firm.
Judge Yates heard oral argument in the case at a hearing held on February 21, 2025. CPAN was allowed the opportunity to participate in the oral argument, and in doing so, voiced strong support for the position taken by the auto insurers in the case.
The ruling of the Court of Claims is an important victory for all of those “legacy patients” who were entitled to benefits under insurance policies sold prior to the enactment of the 2019 legislation. It is estimated that there are nearly 17,000 seriously injured victims who would have experienced benefit reductions had it not been for the Andary decision. The ruling of the Court of Claims now makes it clear that none of the benefit reductions in the new law can be applied to any of these legacy patients.