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Wed January 2, 2013
Judge rules mandatory insurance calculations to be public
A judge has ruled the organization which sets the mandatory fee for no-fault auto insurance must disclose how it calculates the fee.
The Michigan Catastrophic Claims Association or MCCA was created by the Michigan legislature, but the organization claimed it was not subject to Freedom of Information Act requests because it is private. Ingham County Circuit Court Judge Clinton Canady III ruled the MCCA is a public body and that citizens have a right to know how the mandatory rate charged for no-fault medical benefits is calculated.
During the past couple of years, the auto-insurance industry has been pushing to end the part of no-fault insurance which covers unlimited reasonable medical expenses in the worst accidents. It said the coverage is too expensive to continue, but did not reveal how it arrived at that conclusion.
Michael Dabbs is with the Brain Injury Association of Michigan, one of the groups that filed a lawsuit claiming the MCCA data should be public.
“The insurance industry has claimed the MCCA was not financially sustainable. When we asked for the basis of that, they just effectively said, ‘Just believe us. That’s the way it is,'” Dabbs explained.
The other group filing an FOIA request and later a lawsuit was the Coalition to Protect Auto No-Fault.
The latest MCCA annual fee was set at $175 per insured vehicle. That’s 21% higher than the previous year. In the release explaining the increase, the MCCA cited a deficit in funds without revealing the actual data and assumptions behind the decision to increase the fee.