LETTERS: Don’t ignore no-fault reform

Crain’s Detroit Business


I am greatly disappointed to read the Feb. 25 opinion on potential no-fault reforms (“No-fault reform: No data, no deal”).

Rather than analyzing the facts surrounding the structure, purpose and operations of the Michigan Catastrophic Claims Association as well as the need for substantive reforms to Michigan’s unique automobile no-fault insurance system, Crain’s chose to join special-interest opponents to oversimplify and demagogue an important public policy issue.

The MCCA was organized under Public Act No. 136 of 1978 as an unincorporated nonprofit association and has all its dealing directly with insurance companies, not the general public. The purpose of the MCCA was to ensure the solvency of insurance companies when they faced multiple lifetime, unlimited catastrophic claims, as mandated by Michigan’s no-fault law. The MCCA was enacted to provide that protection, because five years into the law the private market for re-insurance was unable or unwilling to assume the “unlimited” liability created by Michigan’s system.

To protect the financial solvency of the system, the act insulated the MCCA from politically motivated efforts to undermine these protections. As a result, the MCCA is exempted in statute from both the Open Meetings Act and the Freedom of Information Act.

All of the resources of the MCCA are dedicated by law to reimbursing insurance companies for payments made on behalf of injured customers. Whether the MCCA exists or not is immaterial to the obligation an insurance company has to provide these benefits.

Michigan’s no-fault system has served our citizens well since its inception. However, any objective observer will recognize that this system needs serious reforms to keep it around for the next 40 years. That is why reform is supported by our governor, the state insurance commissioner, the Michigan Chamber of Commerce and others.

It is important not to fall victim to the tactics of well-financed special interests. Forestalling the debate on no-fault reform until the disclosure of yet-to-be-specified actuarial data is like refusing to put out a house fire until you determine whether it was started by accident or on purpose.

Pete Kuhnmuench
Executive director
Insurance Institute of Michigan