LANSING – State Representative Gary McDowell (D-Rudyard) on Wednesday voted for a plan that will make public the way the state spends taxpayer dollars and force the Michigan Catastrophic Claims Association (MCCA) to answer to Michigan motorists. The plan to increase transparency and accountability in the insurance industry and government now heads to the Senate.
"Our hard-working residents pay for this state to run, and as investors they should know how their tax dollars are being used," McDowell said. "This plan will help ensure no money is being wasted by the government. Our residents have the right to be watchdogs when it comes to spending their tax dollars."
The plan would create an easy-to-use, publicly accessible Web site that details state spending. The Web site would include state expenditures broken down by department, wages being paid to state employees, state contracts, the executive budget and annual reports. Under the terms of the plan, the site must be up and running by Oct 1.
The House also moved legislation that would force the MCCA to open up its rate-setting process for the catastrophic claims fund to public scrutiny in order to protect ratepayers from dramatic rate increases.
The House's plan requires the MCCA, an independent insurance fund that provides for the care of Michigan drivers who are catastrophically injured in an auto accident, to comply with the Open Meetings Act and the Freedom of Information Act. The plan would also allow for public visibility of the MCCA by appointing three members of the public to its Board of Directors, and require an annual audit.
This week, the MCCA raised its assessment by $20.31 a year, charges that are passed on to Michigan consumers. Since 2000, the board has raised its rates from $5.60 to $124.89, with no public oversight over its activities. Michigan is the only state in the nation that offers motorists unlimited personal injury protection. The MCCA serves to reimburse no-fault auto insurers for all benefits that exceed $400,000. The association spreads these costs among all Michigan motorists, yet is a private organization that deals exclusively with insurance companies and not the general public.
"To see the MCCA increase rates to this extreme is not only frustrating, but it's wrong," McDowell said. "Putting Michigan drivers on the agency's Board of Directors will ensure those who pay into the fund are represented. MCCA has been making decisions out of the public eye for far too long. It's time to hold them accountable for their actions."