LANSING – In a move to increase transparency and accountability in the insurance industry and government, Macomb County State Representatives today voted in favor of legislation that will shine a light on the way the state spends taxpayer dollars and force the Michigan Catastrophic Claims Association (MCCA) to answer to the public.
"Residents need to know our government is working on their behalf," said State Representative Jon Switalski (D-Warren). "They deserve to know how their tax dollars are being used, especially during this economic downturn. By opening the state's budget to the public, our residents can make sure their hard-earned dollars are being used wisely."
The plan would create an easy-to-use, publicly accessible Web site that details state spending. The Web site would include state expenditures broken down by department, wages being paid to state employees, state contracts, the executive budget and annual reports. Under the terms of the plan, the site must be up and running by Oct 1.
The House also passed legislation that would force the MCCA to open its rate setting process for the catastrophic claims fund up to public scrutiny in order to protect ratepayers from dramatic rate increases. The plan requires the MCCA, an independent insurance fund that provides for the care of Michigan drivers who are catastrophically injured in an auto accident, to comply with the Open Meetings Act and the Freedom of Information Act. The plan would also allow for public visibility of the MCCA by appointing three members of the public to its Board of Directors, and require an annual audit.
"Decisions made by the MCCA affect every driver in Michigan, yet they don't have to answer to the public," said State Representative Sarah Roberts (D-St. Clair Shores). "Michigan residents are seeing their paychecks shrink, but costs – such as insurance rates – continue to rise. They deserve to know why."
This week, the MCCA raised its assessment by $20.31 a year, charges that are passed on to Michigan consumers. Since 2000, the board has raised its rates from $5.60 to $124.89, with no public oversight over its activities.
Michigan is the only state in the nation that offers motorists unlimited personal injury protection. The MCCA serves to reimburse no-fault auto insurers for all benefits that exceed $400,000. The association spreads these costs among all Michigan motorists, yet is a private organization that deals exclusively with insurance companies and not the general public.
"Every Michigan driver pays into the MCCA fund, but they have no say in how their insurance rates are determined," said State Representative Jennifer Haase (D-Richmond). "As lawmakers, we must work to ensure that our residents are not being taken advantage of. This plan will help do that by making the MCCA transparent to the public."