CPAN – Coalition Protecting Auto No Fault
A look into the mind of an auto insurance executive

A blog post from CPAN President John Cornack:

A recent article in the insurance industry online publication provides some very honest and disturbing insights into how insurance executives view Michigan’s no-fault system.

 
The article, Michigan Auto Insurers: Costs Rising and Market Hardening, starts with Michigan Millers Mutual CEO Tom Lindell stating that our state’s insurers have “been suffering in silence” because the state has not changed its insurance system for the past 30 years. Given the fact that the insurance industry has repeatedly attempted to destroy Michigan’s no-fault system, dating back all the way to Proposals D and C in the early ‘90s – and voters and legislators have told them NO every single time – I would say that insurance companies have been anything but silent.
 
The article also uses the insurance industry’s favorite misleading statement early and often, calling Michigan no-fault injury benefits “unlimited” rather than uncapped. It then takes that statement to another plane of deception when Insurance Institute of Michigan Executive Director Pete Kuhnmuench compares no-fault auto injury benefits to “going to an all-you-can-eat buffet.”
 
The absurdity of Mr. Kuhnmuench’s statement is only exacerbated by his very next statement where he says “the only limitation (to auto injury benefits under Michigan’s no-fault system) is reasonable and necessary in the statute.” And in that brief statement Mr. Kuhnmuench has revealed the insurance industry’s true intentions. It’s not enough for insurance companies to pay for only reasonable and necessary treatments; their goal is to pay only for what is less than reasonable and less than necessary. Amazing.
 
Later on in the article, James Laing, president of Wolverine Mutual Insurance Co., states that he would like to see auto injury benefits capped to $50,000. With that level, according to Laing, Michigan drivers would “probably” save some money. When debating the current legislation – House Bill 4936 – legislators realized that a $50,000 cap on injury benefits was far too low and set it at $500,000, which even at that rate would still shift millions in costs onto Michigan’s Medicaid system. 
 
What’s more, Mr. Laing has proved CPAN’s point that HB 4936 will not bring the rate relief that Michigan drivers need. Instead, the Michigan legislature should look to anti-fraud measures that increase enforcement and penalties for individuals attempting to cheat insurance companies, and for insurance companies that are found guilty of intentionally denying legitimate claims.
 
The article closes by reporting that nine Michigan insurers have hiked their rates by 10 percent or more in the past six months, impacting more than 600,000 policyholders. The fact that this rate hike was timed just prior to the introduction of the insurance industry’s attempts to dismantle Michigan’s no-fault system is not coincidental. And now that HB 4936 has stalled in the House, we are confident insurance companies will continue to try and use rate increases to bully the public into accepting their reforms. 
 
CPAN’s member organizations of health care and rehabilitation providers, along with consumer advocate groups, will not give in to the insurance companies bullying tactics. We will continue to stand strong against legislation that abandons severely injured people and increases costs to taxpayers. Together, we can push for real reforms that increases affordability and ensures the long term continued sustainability of Michigan’s no-fault system. 

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