LANSING – State Representative Sam Singh (D-East Lansing) introduced legislation today that would require the Michigan Catastrophic Claims Association (MCCA) to only deposit money into financial institutions that maintain their principal office or branch office in the United States.
“While the legislature is debating the future of auto no-fault insurance, we still have a responsibility to look out for the public’s best interest and ensure there’s a benefit to the people. Keeping funds in off-shore accounts takes away financial oversight,” said Singh. “Transparency is the paramount issue. One of the ways to provide that transparency is to make sure these financial deposits stay in the United States under a regulatory framework designed for consumer protection.”
IRS filings from 2012 revealed disturbing information regarding the management of the MCCA. The information includes IRS 990 forms showing that the MCCA keeps funds in a bank in the Cayman Islands. Forms filed for 2013 show all funds are currently held in accounts within the U.S. The MCCA is a private, non-profit unincorporated association established by the state legislature in 1978. Under Michigan’s auto no-fault laws, accident victims are entitled to unlimited lifetime coverage for medical expenses. The MCCA reimburses insurance companies for claims in excess of $530,000. Auto insurance agencies pay on annual assessment ($186 per vehicle in 2013-2014) to the MCCA. This cost is typical passed on to individual policy holders.
“The MCCA may have divested from its off shore accounts due to public scrutiny, my bill prevents them from moving money back to those accounts once the spotlight is no longer on their finances,” added Singh.