Legislation will raise transparency standards for the association, ensuring their operations best serve vehicle owners and accident survivors in Michigan
LANSING, Mich. (March 14, 2024) — Today, Sen. Mary Cavanagh (D-Redford Twp.), alongside Sen. Rosemary Bayer (D-West Bloomfield), introduced Senate Bills 793 and 794 to bring greater transparency and accountability to the Michigan Catastrophic Claims Association (MCCA), whose fee-making process has long been shielded from the public’s knowledge. By opening the MCCA up to the Freedom of Information and Open Meetings Acts, adding public representatives to the board, and requiring public disclosure of its finances and methodology, Michiganders will have greater access to information regarding where their money goes.
Additionally, this legislative package eliminates the association’s ability to assess fees to drivers who do not choose the unlimited PIP option. Currently, the law allows the MCCA to charge all drivers, even if they are ineligible to receive benefits. This change will result in lower insurance premiums for all drivers who do not select the unlimited plan.
“As inflation and insurance costs continue to skyrocket, Michigan drivers are bearing the burden every day. Our current laws leave Michiganders in the dark about the MCCA’s methodology and processes in imposing mandatory fees on every driver in the state,” said Sen. Cavanagh, lead sponsor of the bill package. “Drivers in our state are entitled to know how fees are determined, as well as only pay for the coverage they are choosing. This legislation will finally give drivers the transparency and accountability they deserve.”
The MCCA is a quasi-public statewide insurance program created by the Legislature in 1978, whose responsibility is to pay for the care of individuals injured in a car accident when their costs exceed a certain amount. All Michigan drivers are required to pay an annual fee to the MCCA to sustain this fund, however, the association is not bound by Michigan’s Open Meetings Act law, nor are they required to open their books to the public. As a result, their fee-setting process is not disclosed, leaving the public in the dark about how those assessments are calculated.
“For years, Michigan drivers have faced climbing insurance costs with no explanation as to why,” said Sen. Bayer, sponsor of Senate Bill 794. “Since the MCCA is funded by the public’s money, it’s only fair for them to abide by the same transparency standards as other public bodies. It’s time for the Legislature to shine a light on the association and bring accountability to their assessment process.”
In recent years, the MCCA has raised their fees on Michigan drivers to account for a multi-billion-dollar deficit, among other factors. The fee is currently set at $122 per vehicle for unlimited Personal Injury Protection (PIP), up $86 from the year before. Drivers who do not choose unlimited PIP are currently required to pay a $48 annual fee to pay down the fund’s deficit. The fee reached its highest level in 2019 at $220. Currently, the MCCA is not required to disclose the formula used to reach these numbers, leaving many consumers across Michigan wanting answers as to why their insurance bills keep going up.
Sen. Cavanagh has long been an advocate for building a more equitable and accessible auto insurance system. In 2023, Sen. Cavanagh was the lead sponsor of a legislative package — Senate Bills 530, 531 and 575 — that would enhance the 2019 auto no-fault reform and improve access to care for Michigan drivers severely injured in auto accidents.
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