LANSING – In a move that will bring much needed accountability and transparency to the automobile insurance industry, House Democrats today passed legislation that will protect consumers while making the Michigan Catastrophic Claims Association (MCCA) more open to public scrutiny.
"Michigan consumers have a right to know how their rates are set," said State Representative Lee Gonzales (D-Flint Township), who sponsored one of the bills in the legislative package. "If Michigan families are footing the bill, then the insurance industry needs to open itself up to public scrutiny."
The House Democrats' plan requires the MCCA, an independent insurance fund that pays for the care of severely injured motorists, to comply with the Open Meetings Act, add public members to the board and open its records to annual audits.
The MCCA reimburses no-fault auto insurers for benefits that exceed $400,000. The association was created by the Legislature as a means of spreading costs across all Michigan motorists for providing these unique unlimited benefits; however, the MCCA is a private, nonprofit association, and all of its dealings are with insurance companies, not the general public.
Currently, the MCCA assessment is $123 per vehicle. Those charges are in turn passed on to consumers, despite the fact that they aren't allowed representation on the MCCA board. The board has raised its annual rates imposed on all drivers from $14.41 in 2001 to $123 in 2007.