Michigan No-Fault Data to Remain Public While Court of Appeals Decides Transparency Case
LANSING – Ingham County Circuit Judge Clinton Canady III issued an order late yesterday afternoon denying a motion filed by the Michigan Catastrophic Claims Association (MCCA) to stay the enforceability of the judge’s Dec. 26 ruling that the MCCA is subject to the Michigan Freedom of Information Act (FOIA).
In his December decision, Judge Canady stated that “Michigan citizens have a right to know how the insurance premium they pay is calculated to ensure that no-fault insurance is provided on a fair and equitable basis.” Last month, the MCCA filed an appeal asking the Court of Appeals to review Judge Canady’s decision. In yesterday’s ruling, Judge Canady refused to suspend his ruling pending the appeal, pointing out that the only thing the plaintiffs are seeking in this lawsuit is information about the MCCA rate determination process, not a ruling that the MCCA must change its operations.
Citing the landmark Supreme Court decision in Shavers v Attorney General, Judge Canady ruled that Michigan citizens have a constitutional right to the information that plaintiffs seek in this litigation. Moreover, he noted there was no clear showing that any harm would occur by allowing Michigan citizens to access the requested information. Accordingly, Judge Canady denied the MCCA’s Motion for a Stay of Proceedings.
“Plaintiffs CPAN and the Brain Injury Association of Michigan are very pleased with Judge Canady’s ruling. It underscores the significance of this litigation and the importance of the information we are seeking,” said CPAN General Counsel George T. Sinas. “The information we recently requested is critical to protecting the constitutional rights of Michigan citizens, understanding the operation of the MCCA premium calculation process, and determining whether our model no-fault system continues to be financially viable.”
CPAN and BIAMI have asked the MCCA to produce certain specific documents that contain the actuarial and economic assumptions necessary to the determination of the annual MCCA rate assessments that are ultimately passed on to Michigan consumers. The information requested is also important to analyzing the future economic sustainability of the MCCA.
The MCCA, a reinsurance fund created by the state legislature in 1978, is managed by a five-member board made up entirely of insurance companies whose meeting are closed to the public. Every Michigan auto insurance policy is assessed $175 annually to fund the MCCA, which helps reimburse insurers for costs above $500,000 for the care and treatment of seriously injured auto accident survivors. About 13,000 accident survivors are provided care through MCCA reimbursements.
“Judge Canady’s decision is a win for consumers, lawmakers and all drivers in the state of Michigan,” said CPAN President John Cornack. “Insurance companies have been pushing for significant changes to our state’s no-fault system on the premise that the MCCA is facing a deficit. All we’re asking is for the MCCA to show the public and lawmakers the math that justifies the cuts they are proposing. Otherwise, legislators are being asked to vote on significant changes to Michigan’s no-fault system without the information needed to make an informed decision.”
Cornack noted that the proposals being promoted by insurance companies and Gov. Snyder would significantly reduce the quality of care for thousands of injured people, add millions in costs to taxpayers and result in thousands of jobs being lost.
Butch Hollowell, legal counsel for the NAACP, also applauded the Court’s decision and is looking forward to the production of financial data that will determine whether rates are being set appropriately.
It is anticipated that the MCCA will file a similar motion in the Court of Appeals asking the Court to Stay of all Proceedings in the Trial Count and keep the MCCA closed to FOIA until the Court of Appeals has had an opportunity to decide if it will hear the MCCA appeal.
