News - Cheap Travel Insurance UK

Bills shed more light on insurance group

23 March 2008

The Michigan Catastrophic Claims Association recently announced an $18.57-per-vehicle reduction in annual insurance premiums, down to $104.58. To which we say: Great! ... We guess - which is the best anybody seeking a full explanation of the change can do.

The state-mandated MCCA plays a crucial role in Michigan's insurance industry, providing the only unlimited personal injury coverage in the nation for accident victims. Yet it operates with too little oversight. Giving citizens more access to the association's decision making criteria and deliberations would allow the public to determine whether this premium reduction represents a fabulously good deal, or something less than drivers deserve.

Legislation sponsored by Rep. Michael Sak, D-Grand Rapids, would open the MCCA to more scrutiny by requiring the association to comply with the Freedom of Information Act and the Open Meetings Act. In addition, the bills would add members to the agency's board and require annual state audits.

The measures deserve approval. Though the MCCA provides substantial financial data to the public, including audits and actuarial statements, the reasons for rate changes remain a mystery to many. This legislation would balance the association's considerable power to levy fees with the right of citizens to see exactly how that's happening.

The MCCA was set up by the Legislature in 1978 to help insurance companies cope with the state law requiring unlimited lifetime coverage for people hurt in auto accidents. The fee for the MCCA premium cost is tacked on auto insurance bills. Insurers are reimbursed by the MCCA for claim amounts over $420,000. The association receives nearly $1 billion a year in premiums.

The MCCA board, appointed by the state insurance commissioner, consists of five representatives of companies that do most of the auto insurance business in the state. The insurance commissioner sits on the board, too, but he has no vote and is strictly limited in his power to speak publicly about the contents of MCCA meetings.

This unwieldy set-up leaves too much mystery to the board's decisions. This year's rate reduction marks the second annual decrease. But between 2001 and 2005 the

MCCA assessment almost doubled, to $141.70 per vehicle. In addition to opening MCCA proceedings to the public, Sak's legislation would require an annual state audit of the association's books. And it would expand the board to nine, adding three members who represent the general public and one who represents insurance agents.

There is no indication that the

MCCA board has acted incorrectly. Allowing a better view of how the association operates would probably confirm that impression, while at the same time offering confidence in the justification for any big rate swings, especially increases. The public deserves that extra bit of insurance.

Source : http://www.mlive.com