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Whether no-fault reform will happen in 2016 remains to be seen. But commentators at Crain’s Detroit are arguing that one thing needs to come first: transparency.
An opinion editorial published in Crain’s Detroit on Sunday, September 18, 2016, laid out the need for the Michigan Catastrophic Claims Association. The piece emphasized the role of the public in funding the association and advocated for no-fault reforms to increase transparency.
Crain’s chalks up the long-lasting battle over no-fault reform to a lack of information:
“It doesn’t appear likely that legislation on reforming Michigan’s auto no-fault law will pass in the final weeks of the lame-duck legislative session. But the barrier continues to be an old issue: Disclosure of the claims data and future liability estimates of the Michigan Catastrophic Claims Association.”
By casting doubt on no-fault reform in the 2016 legislative session, Crain’s has already put itself at odds with Republican legislators who have labeled it a priority for the fall. It also stands in conflict with an August Court of Appeals decision, which upheld the MCCA’s exclusion from disclosure under Michigan’s Freedom of Information Act (FOIA). Crain’s is taking the position that:
“No-fault reform could be sensible, but before that issue can be addressed, the financials of the catastrophic fund — created by fees paid by insured motorists — should be released.”
While there is still one more shot for appeal to the Michigan Supreme Court by the Coalition Protecting Auto No-Fault (CPAN), it seems the easier road to no-fault reform in this area is through the legislature. If, as Crain’s suggests, legislators are missing key information on no-fault reform, it could stymie any efforts to amend the Michigan No-Fault Act before the end of the year.
Any no-fault reform will be highly controversial, even if it something so simple as records disclosure. The bills currently being considered by the House of Representatives one-sided, and dangerous. They do little to protect consumers from abuses by the industry, while creating an industry-staffed Fraud Authority to crack down on policy holders who commit fraud make misrepresentations in their insurance applications.
The bills also cap medical provider payments. That could reduce the number of doctors and hospitals willing to care for auto accident victims, and make it harder for injured motorists to get the care they need.
Most relevant to Crain’s position, the proposed bills would set up a new fund to pay for any catastrophic claim that goes above $545,000 in no-fault benefits. This fund will be paid directly by residents and businesses obtaining no-fault policies.
Crain’s opinion says that before legislators make the decision to overhaul the MCCA, they first need access to the financial information the Michigan Court of Appeals ruled was secret last month. To get access, the legislature will first have to change the law and make the fund’s information public once and for all.