The Michigan Claims Catastrophic Association increased its annual assessment to insurers by 11 percent to $141.70 per insured vehicle from $127.24, drawing sharp criticism from the state’s insurance regulator.
In a statement, the MCCA said an increase in the cost of providing people severely injured in auto accidents with lifetime medical care led to the decision, which is effective from July 1, 2005 through June 30, 2006. The state offers unlimited lifetime medical benefits for people in catastrophic accidents. The group estimated that 1,500 Michigan insureds would be catastrophically injured in auto accidents next year.
Office of Financial and Insurance Services Commissioner Linda A. Watters responded angrily to the announcement, decrying MCCA’s “lack of public accountability.” She urged state politicians to pass a bill subjecting MCCA to the state’s freedom of information and open meetings acts.
“The time has come for fundamental changes in the way the MCCA conducts its business in order to instill public confidence in the decision-making process that has a direct impact on every Michigan driver’s pocketbook,” Watters said in a statement. “The time has come for the MCCA to provide Michigan citizens with a basic level of public accountability by lifting the cloak of secrecy that has shrouded their operations.”
The MCCA said it pays out $50 million each month for claim costs resulting from catastrophic injuries. The majority of these catastrophic injuries involve severe closed-head injuries, paraplegia, quadriplegia and burns. Since 1979, there have been more than 18,000 claims reported to the MCCA, which will cost an estimated $47 billion.
The MCCA was created by state law in 1978. All insurance companies that write auto insurance in Michigan are required to be members. The MCCA reimburses member insurance
companies for personal injury protection claims that have exceeded $350,000. That amount increases gradually each year.
Watters said she does not oppose MCCA’s reinsurer function but believes the “legislatively created private association is fundamentally flawed in that it lacks public accountability.”
william pelak says: 
michael bachelder says: 
Betty Pennington says: 
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