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Judge rules Michigan car insurance fund must open its books
By Insure.com staff

A Michigan association responsible for setting an annual no-fault car insurance assessment on every insured vehicle in the state must open its records to the public, a county court judge ruled.

The ruling was the result of separate lawsuits brought by the Coalition Protecting Auto No-Fault and the Brain Injury Association of Michigan.

Ingham County Circuit Court Judge Clinton Canady III ruled that the Michigan Catastrophic Claims Association is subject to the Freedom of Information Act.

"Lawmakers, the press and the public will finally have the opportunity to get the full truth regarding the MCCA and the premium increases it routinely levies," John Cornack, president of the coalition, said in a press statement.

Created by the state legislature in 1978, the association is a private reinsurance fund. The association reimburses car insurance companies for costs above $500,000 to treat seriously injured auto accident survivors. Michigan law guarantees unlimited personal injury protection benefits for people injured in car accidents.

Each year the association sets a per-vehicle assessment, which car insurance companies must pay. The assessment is generally passed onto policyholders. The assessment for 2012-2013 is $175 per vehicle.

A five-member board of insurance industry representatives controls the association, whose meetings are closed to the public. Until the court ruling, there was no way to verify whether the association was charging appropriate rates to sustain itself, Michael Dabbs, president of the Brain Injury Association of Michigan said.

The association argued that it's not a public entity, and that it already discloses information through filings with the state.

The Coalition Protecting Auto No-Fault said that it plans to consult with insurance regulation experts to investigate the association's financial records.

The case is one more wrinkle in the debate over the state's no-fault auto insurance system. Insurance industry leaders have been calling for reform, saying the lifetime benefits guarantee leads to higher costs. Michigan has among the highest car insurance rates in the country.

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