DETROIT – Michigan Gov. Gretchen Whitmer is calling on the Michigan Catastrophic Claims Association (MCCA) to deliver refund checks to Michigan drivers after reporting a $5 billion surplus earlier this year.
The MCCA is a private nonprofit association established by the Michigan Legislature in 1978. Its purpose, until auto insurance reform was enacted in 2020, is to reimburse no-fault insurance companies for Personal Injury Protection (PIP) medical claims paid in excess of a set amount under policies of insurance providing unlimited lifetime coverage.
Michigan law no longer requires owners and registrants to buy unlimited lifetime coverage for medical expenses resulting from motor vehicle accidents.
The MCCA assesses all auto insurance companies operating in Michigan to cover catastrophic medical claims occurring in Michigan because of motor vehicle accidents. Insurance companies generally pass those assessments on to their auto insurance policyholders. The 2021-2022 assessment is $86 per vehicle.
In a letter, Gov. Whitmer said the MCCA reported a $2.4 billion surplus at the end of last year, and now the surplus is up to $5 billion. She is calling on the association to deliver refund checks to all Michigan residents with auto insurance.
“The over $5 billion surplus accumulated by the MCCA belongs to Michiganders and should be put in people’s pockets immediately with a refund check,” said Whitmer. “As we stay-laser focused on growing our economy and ushering in a new era of prosperity we need to use every resource we have to help people thrive. A refund check to working families will help us continue to put Michiganders first and drive down costs.”
Read the full letter below:
The Insurance Alliance of Michigan released this statement:
“Reforms passed with bipartisan support and signed by Gov. Gretchen Whitmer include a way to ensure drivers would get money back from the MCCA if there is a surplus. Under law, this money goes back to Michigan insured drivers, which the Insurance Alliance of Michigan and its members strongly support. Moving up the timeframe for a refund, as the governor now proposes, makes it even more important to stay the course with the full reforms. Long-term care is the number one cost driver within the MCCA and is currently subject to the reasonable medical fee schedule. Changes to any part of reform will have a domino effect that will change the MCCA’s long-term liabilities, increase premiums and drive up costs at a time when Michiganders can least afford it.”