Whitmer Claims Insurance Reimbursement Of $ 675 Per Car For Drivers | State
LANSING, Mich. (AP) – Gov. Gretchen Whitmer on Monday called for early insurance reimbursements of about $ 675 per vehicle to drivers.
In a letter to the Michigan Catastrophic Claims Association, the Democratic governor cited a $ 5 billion surplus which she attributed to premium overcharges and a law 2019 which reduces the medical costs of insurers for people injured in accidents. She also said that many residents faced financial hardship during the COVID-19 pandemic.
The association is a state-created not-for-profit entity that reimburses auto insurers for health care claims over $ 600,000. Previously, Michigan required motorists to pay a one-time annual fee per vehicle that once exceeded $ 200 decrease in two years at $ 86 since the law was passed. Coverage has been optional since last year, although around 80% of drivers have kept it.
“The billions of excess funds should not be held by insurers to invest for their own benefit or be conditional on policy renewal. The surplus belongs to Michigan policyholders and should be returned to them immediately in full, in the form of refund checks, ”Whitmer wrote.
MCCA executive director Kevin Clinton said the board, made up almost entirely of insurance companies, would review the request.
“The governor’s proposal is both higher in terms of dollars coming out and earlier than the law says. … I don’t think we’ll probably go as high as she does, even if the board decides something, because that would leave us with no surplus at all, ”he said.
Under the 2019 law, the state insurance director must hire an independent actuary starting next year and every three years thereafter to audit the MCCA. If the review – due by September – shows that MCCA’s assets exceed 120% of its liabilities, the difference must be repaid.
“If we applied the law’s formula to today’s numbers, that would mean around $ 100 per car,” Clinton said.
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