(CBS Detroit) - The Michigan Catastrophic Claims Association (MCCA) announced Wednesday it voted unanimously in support of issuing refund checks to drivers, a few days after Gov. Gretchen Whitmer issued a letter to the association.
The association is a state-created nonprofit entity that reimburses car insurers for health care claims surpassing $600,000. Michigan used to require motorists to pay a unique, annual per-vehicle fee for unlimited health coverage until passage of the law.
The fee once surpassed $200 before dropping over two years to $86 currently. The coverage is optional as of last year, though about 80% of drivers have kept it.
"As we continue to put Michiganders first, I am always working to find ways to lower costs and use every resource we have to help Michiganders thrive," Whitmer said in a statement Wednesday. "It is great news that the Michigan Catastrophic Claims Association has swiftly taken action in response to my letter this week to begin the process of issuing refund checks to help drive down the costs and produce savings for Michiganders with auto insurance. Michiganders have paid into the catastrophic care fund for decades, and these funds from the $5 billion surplus belong in the pockets of Michigan policyholders."
According to a statement from the association, details on the specific refund amount per vehicle, as well as proposed timeline and logistics, will be announced in the next few weeks.
"The goal is to issue the largest possible refunds to consumers while maintaining sufficient funds to ensure high-quality care to those who have been catastrophically injured," read the statement.
In a letter to the association, Whitmer cited a surplus of $5 billion that she attributed to premium overcharges and a 2019 law that cut insurers' medical costs for people injured in crashes. The surplus was up from $2.4 billion a year before, according to a report issued in the summer. She also said many residents have faced financial hardships during the COVID-19 pandemic.
"I applaud the MCCA's quick response to the Governor's call for the MCCA to provide the maximum refund of its $5 billion surplus to Michigan policyholders while maintaining the viability of the fund for auto accident survivors," said Anita Fox, director of the Department of Insurance and Financial Services. "I urge the MCCA Board to act promptly to determine the amount of and process and timetable for expeditiously issuing refunds to all Michiganders with auto insurance."
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