Appeals court rules against FOIA in no-fault auto decision

Michigan drivers are paying at least $186 a year for each car, truck and motorcycle they insure to a state created, non-profit private association tied to the no-fault insurance laws to cover the costs of accident victims with catastrophic lifetime injuries. Yet, even thought the Michigan Catastrophic Claims Association (MCCA) holds billions of motorists’ dollars, a three judge Court of Appeals panel ruled Tuesday (May 21) that the MCCA can hide information on those funds and how they’re distributed from public view. The Michigan Coalition for Open Government, which champions access to public information, finds today’s decision regrettable and yet another move to chip away the bedrock principle of open, transparent and accountable government in the state. The state catastrophic claims fund and the non-profit MCCA were created by the state legislature in 1978. It reimburses auto no-fault insurance companies when they have to pay out more than the mandatory limit on personal injury medical claims currently set at $530,000. Michigan’s no fault law “provides unlimited medical benefits for people who are catastrophically injured in auto accidents,” according to the MCCA website. The funding comes from monies that insurance companies pay into the association, but those costs are “generally passed on to auto insurance policy holders,” according to the MCCA website. All insurance companies that sell auto and motorcycle coverage in Michigan are required to be MCCA members. Five of those companies (Auto Club Insurance Association, Auto-Owners Insurance Company, Citizens Insurance Company of America, Farmers Insurance Group and State Farm Mutual Automobile Insurance Company) have seats on the board of directors of the group. Those companies are appointed by the Michigan Department of Insurance and Financial Services director, a public employee. Some lawmakers have tried to change Michigan’s no-fault law, saying the assessments are a burden on consumers and are likely to continue to rise unless unlimited medical benefits are capped. They’ve introduced House Bill 4612, which would amend the state’s no-fault law and limit the amount of money that has to be paid for catastrophic injuries, among other significant changes. Their efforts have been opposed by the Coalition Protecting Auto No-Fault (CPAN), a group of major medical and consumer groups that wants to keep no-fault insurance so accident victims can continue to get the high level of care they now get under no-fault. CPAN filed a lawsuit in January 2012 to force MCCA to make all or most of its records public, saying that language in the legislation that exempted public disclosure violated both the state constitution and the FOIA. The Brain Injury Association of Michigan later joined the lawsuit. An Ingham County Circuit judge ruled in favor of CPAN saying that Michigan’s residents have a right to know how MCCA determines how much the state’s motorists will pay each year into the fund. MCCA appealed, and Tuesday the Court of Appeals overturned the trial judge’s ruling in a 3-0 vote. The issue may eventually go to by the state’s high court, a body that has frequently ruled against public disclosure and FOIA. Relevant language in the statute said: “Except as expressly provided in this section (500.3104 Catastrophic claims association), the association is not subject to any laws of this state with respect to insurers, but in all other respects the association is subject to the laws of this state to the extent that the association would be if it were an insurer organized and subsisting under chapter 50.” The Court of Appeals ruling says that Michigan’s FOIA law doesn’t cover MCCA because the law exempts associations, and the MCCA is an association of insurers. The decision leaves the public with too little information. As Michigan’s no-fault law is debated, citizens who pay into the MCCA deserve to know more than just what the insurance companies who control the fund want to tell them.