Mich. Hosts Hearings on Auto Insurance Affordability; Industry Counters

The Michigan Department of Insurance and Regulation’s consumer advocate is hosting a series of public hearings on the issue of insurance affordability. Melvin Butch Hollowell was appointed by Governor Jennifer M. Granholm in March 2008, as Michigan’s first Automobile and Home Insurance Consumer Advocate.

Two public hearings were held this week in Bay City and Grand Rapids, Mich. The third is scheduled for Saturday, Nov. 15th at the Cadillac Place, MI Gaming Control Board Hearing Rm., Annex, Intermediate Level, 3044 W. Grand Boulevard, Detroit.

At the Bay City public hearing Hollowell explained his motivation for hosting the hearings.

“True reform comes from citizens who are well-informed and engaged in a discussion about issues that affect them. Today’s hearing provided incredibly important public testimony about ways to improve our 35-year-old no fault insurance law,” Hollowell said. “This information will help shape the recommendations for reform I will submit to Gov. Jennifer M. Granholm at the end of the year in my annual report.”

Hollowell said the the purpose of the hearing was to receive testimony from consumers, industry experts and other stakeholders to address whether Michigan’s auto insurance rates are affordable and whether the de-regulation of the insurance industry allowed for adequate oversight of auto insurance rates?

Testimony was given by consumer advocate Birny Birnbaum, executive director of the Center for Economic Justice in Washington, D.C. Birnbaum was formerly chief economist for the Texas Department of Insurance. Joseph Olsen, former state insurance commissioner and retired Amerisure executive, testified on behalf of the insurance industry.

It is unclear whether these experts will testifiy in Detroit as well.
Testimony received at the hearing(s) will inform the Advocate’s recommendations for auto insurance reform, to be contained in the Advocate’s Annual Report to the Governor. The Executive Order creating the Advocate position requires the Annual Report to contain recommendations for administrative, legislative, or other corrective actions that would positively affect the interests of automobile insurance consumers, the release from the advocate explained.

In addition to Joseph Olsen testifying for the industry, a national insurance group contacted the Insurance Journal with comments saying the advocate was “politically motivated” and was ignoring key factors about the Michigan market.

“Only Michigan mandates unlimited, lifetime medical benefits for auto accidents. If consumers were allowed to select levels of coverage (such legislation stalled this year) rates could be adjusted to reflect that,” American Insurance Association spokesperson Jeff Junkas said. “Michigan homeowners’ rates, with no such unlimited benefit, rank in the middle of all states and the advocate doesn’t seem to be as zealous to attack that well-functioning aspect of the market.”

“Additionally, the AIA welcomes his (Hollowell’s) examination of other states, such as the successful Illinois, Indiana, Wisconsin or Ohio models, where he’ll find that much could be imported to change Michigan’s system for the better for everyone,” Junkas added.

The last public hearing will be held on Saturday, Nov. 15 in Detroit.

Topics Auto Legislation Michigan