In a long awaited opinion, the Michigan Court of Appeals ruled that the Michigan Catastrophic Claims Association (MCCA) is not subject to the state open records law or the Freedom of Information Act (FOIA). The case, CPAN v. MCCA can be found here.
What this ruling means is that the MCCA, which is a private, non-profit association created by the Legislature to reimburse car insurance carriers for no-fault claims that exceed $530,000, does not have to disclose its financial records to the general public. This despite the fact every single policyholder pays $186 per vehicle to the MCCA every year to fund the association and the association has been claiming for years it is in dire financial shape.
Policy holders, medical providers, attorneys and other advocacy groups have been trying for years to get the MCCA to open up its books. The MCCA has claimed the association is essentially broke and not able to keep up with future catastrophic no-fault claims. However, proof (such as financial discloses and financial records) has never been supplied to the public to back up these claims. In addition, the alleged financial problems the MCCA has been undergoing has been used as leverage in recent battles in Lansing as the car insurance industry seeks to destroy the Michigan no-fault system.
In November 2011, a lawsuit was filed under the Freedom of Information Act (FOIA) to get the MCCA to reveal its books. The groups wanted access to rate calculation information, claiming that this information is necessary for an informed debate on the proposed legislature changes. A judge in Ingham County ruled in favor of the plaintiffs, ordering the MCCA to reveal this information. In his ruling, Judge Clinton Canady stated “Michigan citizens have a right to know the MCCA rate charged to insurers is calculated, because citizens ultimately end up paying that rate as part of the premium charged by insurers.” The Court or Appeals reversed Judge Canady’s ruling.
Unsurprisingly, the MCCA, which is run and managed by auto insurance companies, applaud the Court of Appeals ruling.
It is certain this decision will be appealed to the Michigan Supreme Court. Given the political makeup of the court, which is presently a 5-2 split in the Republicans favor, it does not seem likely the public will ever get to see the financial data and assumptions the MCCA is relying upon. It is also unlikely Governor Snyder will force the insurance industry’s hand and order it to reveal the information the public seeks to obtain.
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