Governor orders audit into Michigan Catastrophic Claims Association

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Governor Gretchen Whitmer directed the Department of Insurance and Financial Services to conduct an audit into the Michigan Catastrophic Claims Association, or MCCA, after the board voted to impose an additional fee increase of $28 on drivers. The fee is added to a driver’s insurance premium, bringing the total fee to $220 per vehicle.

“From Detroit to the Upper Peninsula, drivers are feeling the pinch of paying the highest auto insurance rates in the nation and it’s time to do something about it,” Whitmer said. “Michiganders deserve to know why they are being forced to shell out hundreds of dollars in additional fees for car insurance, which is why I’m ordering an audit to provide drivers with the transparency they deserve.”  

The MCCA has increased the fee motorists pay to cover catastrophic medical claims annually for the last three years. In 2017 the increase was 6.3 percent, in 2018 it was increased an additional 13 percent and 14.5 percent in 2019.

To put those increases into perspective, drivers pay more than twice as much as they did in 2008. 

On Wednesday, March 13th, 2019, officials from the MCCA testified before the Senate Insurance and Banking Committee that fee increases were the result of “waste and fraud” in the medical system. However, today’s increase comes on the heels of a volatile market that caused the association’s investments to miss their projected returns.

The MCCA is a private non-profit unincorporated association that was created by the state Legislature in 1978 to provide unlimited lifetime coverage for medical expenses over $555,000 resulting from auto accidents. The MCCA is not subject to the Freedom of Information Act and Open Meetings Act.

The Department of Insurance and Financial Services has the legal authority to visit the MCCA and examine any and all documents to conduct a thorough review of the association’s operations, which was last conducted in 2015.

“Today we told the MCCA that we were concerned and strongly urged them to provide more information so the public can understand the basis for this fee increase,” Anita Fox said, who serves as director of the Department of Insurance and Financial Services and sent a representative to the board meeting. “To provide greater transparency, we welcome Governor Whitmer’s direction to conduct a financial examination into the association’s operations.”

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