New Bill Would Expose MCCA Insurance Fees

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Every year, drivers all across Michigan pay a fee through their auto insurance policies to fund the Michigan Catastrophic Claims Association. The MCCA has claimed that how that fee is calculated is private, but a bill in the Michigan House of Representative could change that.

The Michigan Catastrophic Claims Association is a non-profit organization made up of every auto insurer licensed in the state of Michigan. It reimburses insurers for the medical expenses of Michigan’s most severely injured drivers (above $530,000.00).

The cost of these expenses is distributed among all of the no-fault auto insurance policies in the state. Every driver pays a fee each year ($150 in 2014) to ensure that after a catastrophic car crash, their lifetime medical expenses will be covered.

The MCCA has claimed that it is not required to disclose how it sets its annual fee. Last year, a Michigan Court of Appeals agreed with the MCCA. The case is now up for consideration before the Michigan Supreme Court.

At the same time, the Michigan Legislature is considering a number of different reforms to the state no-fault system, including one bill that would shut down the MCCA and create a new organization in its place. It is not clear from the bill what would happen to it’s $17.6 billion in funds (as of its 2014 annual report).

That is where House Bill 4752 comes in. According to its sponsor, Rep. Derek Miller, D-Warren:

“It’s my opinion that before changes are discussed we need to have a complete understanding of how this fund is managed and the financial stability of this fund.”

His bill would require the MCCA to provide an annual accounting explaining how it calculates its fees. The information would be provided to the public on the MCCA website, making it readily available to groups like the Coalition to Protect Auto No-Fault, the plaintiff in the Michigan Supreme Court case.

Obviously the organization supports the bill. CPAN President John Cornack made this statement:

“CPAN has long held that the MCCA should be transparent and open to the public. Drivers pay into this fund every year. They should have the right to know how the fees are calculated and how the MCCA’s costs are projected.”

But it’s not the only one. Within a week of its proposal, nearly half of the Michigan House of Representatives had come out in support of the bill.

Legislators support for the bill may stem from a belief that drivers should have access to information about the fees they pay. Or they may simply be trying to get enough information to pass no-fault reform legislation. Either way, if House Bill 4752 passes it will be a benefit to drivers and the organizations that help to protect them.

David Christensen is an auto accident attorney at Christensen Law in Southfield, Michigan. He and his team fight for injured motorists against the insurance companies. If you or someone you know has been in a serious car accident, contact Christensen Law today for a free consultation.