Michigan appeals court: Catastrophic Claims Association exempt from FOIA

Chad Livengood
Detroit News Lansing Bureau

Lansing — The records of an auto insurance industry-run association that covers medical costs for catastrophic accidents is exempt from Michigan’s Freedom of Information Act, the state Court of Appeals ruled Wednesday.

Hospitals, physicians and trial lawyers have been trying to pry into the records of the Michigan Catastrophic Claims Association in a bid to undercut claims by the auto insurance industry that the fund is unsustainable and that Michigan’s no-fault law needs reform.

But in a ruling issued Wednesday, a three-judge appellate panel concluded state’s open records 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.

Appeals Court judges Stephen L. Borrello, Donald S. Owens and Elizabeth L. Gleicher signed the unanimous ruling.

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.

The Coalition Protecting Auto No-Fault (CPAN) and the Brain Injury Association of Michigan filed a FOIA lawsuit in 2012 against the MCCA in an effort to get actuarial data and economic assumptions used to set the assessment rate.

“Obviously, we’re disappointed in the decision,” CPAN spokesman Josh Hovey said Wednesday. “We’ll be reviewing the court’s ruling and be announcing our next steps in our battle to provide transparency to Michigan drivers on how their rates are set.”

Created in 1978 by the Legislature, the MCCA’s board is governed by auto insurance executives appointed by the director of the Michigan Department of Insurance and Financial Services. The Livonia-based association posts financial information on its website about its $15.5 billion in assets and liabilities it claims amount to a $1.1 billion deficit.

Pete Kuhnmuench, executive director of the Insurance Institute of Michigan, a property and casualty insurance industry group, praised the Court of Appeals ruling.

“The court confirmed that the state regulates insurance and the Michigan Catastrophic Claims Association (MCCA)’s pertinent financial data is available from Department of Insurance and Financial Services (DIFS) or the MCCA website,” Kuhnmuench said Wednesday in a statement.

Hovey said the MCCA’s publicly available financial reports provide “no verifiable information to ensure consumers are being charged fairly.”

Lawmakers have targeted the no-fault law for reforms in an effort to drive down the cost of auto insurance in Michigan, especially in Detroit and other urban areas. But legislation remains stalled as the auto insurance and health care lobbies continue to clash over the issue.

Originally posted by The Detroit News