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Since 2012, the Coalition Protecting Auto No-Fault and the Brain Injury Association of Michigan have been seeking access to the Michigan Catastrophic Claims Association’s (MCCA’s) records. They wanted to see how the association’s premiums affect consumer no-fault insurance rates. But the consumer organizations’ earlier success was cut short when the Court of Appeals recently ruled in favor of the MCCA.
The consumer organizations partnered with several individual plaintiffs and sued the MCCA for access to their records under the Michigan Freedom of Information Act (FOIA). The MCCA was created by statute to protect no-fault insurers. The MCCA collects annual premiums from the insurers and then reimburses insurers for catastrophic claims by their policy holders beyond certain financial limits.
The plaintiffs wanted to know how the rate was calculated and how it affected consumers’ no-fault insurance premiums, so they filed a FOIA request for information including the ages of claimants, dates of injuries, dates cases were closed, and total claims paid. The MCCA refused, claiming it was exempt from FOIA requests according to statute.
Even though the trial court had found that Michigan citizens had a right to know how their rates were calculated, the Michigan Court of Appeals disagreed. It ruled that while the public had a common law right to access the records of public entities, FOIA overrode the common law. FOIA allowed the legislature to exclude certain records from disclosure, and the statute creating the MCCA did just that. That means that the public, including the consumer organizations and the individual plaintiffs, had no right to request the MCCA records.
The ruling deals a big blow to no-fault consumer advocate groups. Michigan No-Fault insurers pass the cost of the MCCA premium on to their customers in the form of increased insurance rates. Without transparency through FOIA, there is no way for consumers to challenge their rates or the underlying premium if it becomes excessive.
There is already a bill under consideration in the Michigan House of Representatives that will correct the problem. House Bill No. 4551 would amend the No-Fault insurance law to require the MCCA to respond to FOIA requests. This increased transparency will give customers more power to negotiate and protect from industry-level overcharges. If you believe the insurance company should be more closely regulated, contact your state representative and tell him or her to support these bills.