Mich. Gov. Whitmer Fights to Lower Costs for Drivers, Calls for Refund Checks to Every Michigander With Auto Insurance

LANSING, Michigan, Nov. 2 -- Gov. Gretchen Whitmer, D-Michigan, issued the following news release:

Governor Gretchen Whitmer continued her fight to lower costs for Michigan families, calling on the Michigan Catastrophic Claims Association (MCCA) to deliver refund checks to every Michigander with auto insurance. This refund is possible in part because of the historic, bipartisan auto insurance reform signed into law by the governor in 2019 and would return money to every Michigander 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 Governor Gretchen 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."

Auto Insurance Reform

In May 2019, Governor Whitmer signed Senate Bill 1 into law, instituting historic, bipartisan reforms to fix Michigan's broken auto insurance system. The bill saves drivers money by:

* Guaranteeing lower rates for drivers for eight years;

* Giving people choice to pick their own Personal Injury Protection (PIP) options with coinciding PIP rate reductions, offering unlimited coverage (at least 10% PIP reduction), $500K coverage (at least 20% PIP reduction), $250K coverage (at least 35% PIP reduction), $50K coverage for Medicaid eligible recipients (at least 45% PIP reduction), or a complete opt out for seniors or anyone with sufficient private insurance (100% PIP reduction).

* Increasing consumer protections by banning companies from using the following non-driving factors to set rates: ZIP code, credit score, gender, marital status, occupation, educational attainment, and homeownership.

* Setting fee schedules for hospitals and providers to prevent overcharging for auto-related injuries.

* Letter, Gov. Whitmer to MCCA (11.1.21).pdf

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To: R. Kevin Clinton, Executive Director, Michigan Catastrophic Claims Association, 17584 N. Laurel Park Dr., Livonia, MI 48152

Dear Mr. Clinton,

My office recently reviewed the Annual Report of the Michigan Catastrophic Claims Association (MCCA) to the Legislature issued in September 2021. The report stated that the MCCA had a surplus of $2.4 billion at the end of 2020. In your annual statement issued on June 30, 2021, the surplus is now $5 billion. I am calling on you today to refund money to Michiganders.

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. These refunds will help us continue to put Michiganders first and drive down costs for working families.

The surplus reflects premium overcharges and is partly a reflection of the cost-saving measures implemented in the historic, bipartisan no-fault reform legislation I signed into law in 2019. Since then, many Michiganders have experienced financial hardships during the ongoing COVID-19 pandemic. Now is not the time for the MCCA to withhold money owed to Michiganders. I urge you to move swiftly to return the surplus funds to policyholders in the form of lump-sum checks.

Billions in surplus funds should not be held by insurers to invest for their own profit or be conditioned on the renewal of a policy. The surplus belongs to Michigan policyholders and should promptly be returned directly to them in full, in the form of refund checks.

Sincerely,

Gretchen Whitmer, Governor