Auto insurance no-fault program in Michigan faces appeal

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The system is going to be headed to the state Supreme Court due to the high rates it has caused.

A group called the Coalition Protecting Auto No Fault (CPAN) has filed a lawsuit against a private fund that provides people with reimbursements when they have been seriously injured in vehicle accidents, as they claim that this is driving auto insurance rates higher.

The group is seeking to determine how insurance rates are being affected by this practice.

The issue that the CPAN is hoping to resolve primarily concerns information. The reason is that the Michigan Catastrophic Claims Association (MCCA), the private fund that has been sued, has been adding a fee to auto insurance policies in order to cover the cost of the reimbursements that it has been issuing. CPAN is not necessarily contesting this practice but is instead hoping to add some more transparency, as the MCAA currently refuses to make public any of the documents that would reveal how its rates are set.

CPAN wants the auto insurance rate setting practices of the MCAA to be made available to the public.

auto insuranceAccording to the president of CPAN, John Cornack, “They get to be Oz behind the curtain.” He also went on to say that “until someone pulls that curtain back, we really don’t know how they’re setting these rates on either side of that teeter-totter.”

An attorney for CPAN, George Sinas, explained that CPAN feels that it could suggest that the data that the MCAA has refused to reveal may not support what they are actually doing. He explained that if it did, they would be more willing to show the public what they are doing. “Otherwise, they ought to cough it up. And they won’t,” he said.

The MCAA has stated that they are already sharing a considerable amount of the information of this nature online. It explained that as it is not a public entity – as it is a private firm – it is not subject to the regulations that are laid down by the Freedom of Information Act (FOIA).

The lawsuit is now taking this issue of information regarding the calculation of the auto insurance rates to the Michigan Supreme Court to allow a legal decision to be made.

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