bernstein blog

Court says insurance association records are not public
July 30, 2014 06:40AM EST

The Michigan Court of Appeals ruled recently that the financial records of the Michigan Catastrophic Claims Association, which covers medical costs for the most costly auto accidents, is exempt from the Freedom of Information Act.

Hospitals, physicians and lawyers who represent people injured in automobile accidents have been trying to get the MCCA to make its records public after the association claimed that Michigan’s no-fault auto insurance system is unsustainable. In 2012, the Brain Injury Association of Michigan and the Coalition Protecting Auto No-Fault (CPAN) sued the MCCA to get economic data.

The association’s board is made up of auto insurance representatives, and has supported proposals to cap lifetime medical benefits for injured motorists; unlimited lifetime medical care to treat automobile accident injuries is one of the cornerstones of Michigan’s no-fault system. The argument for making the records subject to FOIA is that because all Michigan drivers pay into the MCCA fund that covers paying for those medical benefits, the association is akin to a public body.

According to a story in The Detroit News  the a three-judge panel unanimously concluded that state’s FOIA law “‘unambiguously exempts ‘a record of an association or facility’ from disclosure,’ overturning Ingham County Judge Clinton Canady III’s earlier ruling that the MCCA has to open up its records to public inspection.

“Under state law, the quasi-governmental MCCA charges $186 per car insurance policy to cover medical costs for drivers injured in accidents that exceed $530,000 per claim. The association said in March it paid out $1 billion in claims in 2013.”

From the Detroit Free Press: “Transparency is essential for public trust in the rate-setting process and ‘our legal team has reviewed the court’s decision and believes there is palpable error in the ruling, entitling CPAN to ask the court to reconsider its decision,’ [CPAN spokesman Josh Hovey] said.”

Meanwhile, Michigan House Democrats and Republicans are at odds over how to reform no-fault, if one is to assume without seeing the financial data that the association’s statements that unlimited medical benefits are unsustainable. According to, “House Democrats say Michiganders could save money on their auto insurance without capping personal injury benefits by targeting other areas of state insurance law.”

Earlier this month they proposed a package that would change the way insurers set rates, as well as making the MCCA more transparent. “They’ve opposed efforts by Republicans to address Michigan’s high auto insurance rates by limiting coverage for catastrophic injuries in auto accidents.”

Democrats proposed “banning insurers from raising rates when consumers are involved in an accident that’s not their fault and forcing insurers to justify rate increases and get state approval before hiking prices” and would prohibit charging insurance buyers more based on where they live.

Republican proposals have supported capping benefits and bringing medical provider charges in line with other insurance fee schedules. Currently, medical providers can often charge the MCCA higher rates than they charge insurance companies like Blue Cross or public insurance like Medicare.

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