February 05, 2009
LANSING - Governor Jennifer M. Granholm has taken another step to protect citizens from skyrocketing auto insurance rates by calling on the Michigan Catastrophic Claims Association (MCCA) to freeze the assessment it levies on auto insurance companies at 2008 levels.
"Assuring that all Michigan residents have access to affordable automobile insurance is critical to growing strong communities and a thriving economy," Granholm wrote. "While policymakers in Lansing tackle the vital issue of comprehensive automobile insurance reform, I urge you to do your part."
In her 2009 State of the State address, Granholm called on lawmakers to enact comprehensive auto insurance reform to ensure that Michigan auto insurance rates are fair and affordable. She also called on auto insurers to freeze their rates for the year to give lawmakers time to enact reforms.
The MCCA is a private, nonprofit association of all insurers engaged in writing no-fault auto insurance in Michigan. The MCCA reimburses no-fault auto insurers for benefits that exceed $440,000. Although MCCA's assessment is made to insurance companies, that cost is typically passed on to auto insurance policyholders. The current assessment level is $104.58 per vehicle.
The reforms the governor would like the legislature to enact were released yesterday by Melvin "Butch" Hollowell, Michigan's Automobile and Home Insurance Consumer Advocate. Hollowell's report called for making rates more affordable, expanding coverage choice, and strengthening insurance industry oversight.
The Insurance Advocate's recommendations also include:
- Requiring insurance companies to obtain the OFIR Commissioner's approval prior to raising their rates;
- Banning the use of credit scoring, occupation and education level in determining rates;
- Enacting tougher penalties for companies who raise rates, or cancel a policy, after a claim is submitted when the policyholder is not at-fault; and;
- Strengthening the OFIR Commissioner's authority to award refunds to consumers, upon a finding that a company has overcharged policyholders.
"Michigan consumers deserve the same protections drivers in other states enjoy," said Granholm. "At a time when our families are forced to do more with less, we must enact comprehensive auto insurance reforms that ensure that rates are affordable."
For a full list of the insurance advocate's recommendations go to www.michigan.gov/lowerratesnow
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