State Rep. Peter Lucido, of Shelby Township, has submitted bills to improve actuarial transparency for the Michigan Catastrophic Claims Association Fund and require a license, insurance and bonding for auditors contracted by local governments to review detailed financial accounts and records.
Both bills have been assigned to the House Insurance Committee.
“Pure and simple – the people deserve to know how their insurance rates are set and not be forced to pay twice for auditors contracted by a county, city, village or township,” said Lucido.
House Bill 4889 calls for auditors to acquire a state license, professional liability insurance, and a bond of at least $25 million when under a public government contract, similar to how attorneys and construction companies are to ensure costs of performing a contract’s specific responsibilities are covered.
“These are qualified individuals expected to do the peoples’ work, but what if they don’t do a satisfactory job of examining all facts and figures, and mistakes are made?” Lucido said. “Taxpayers should not be paying twice if someone’s hired for a job and does it wrong, which could bring on added costs and expenses. Auditors are equally responsible as anyone else with a license in this state, regardless of doing it for a private business or the government.”
HB 4890 is a measure to address the rising costs of automobile no-fault insurance in Michigan, by requiring public disclosure of actuarial calculations by the Michigan Catastrophic Claims Association (MCCA) Fund, which pays for auto accident-related medical care if the costs exceed $555,000.
“The MCCA fund has somewhere around $20 billion dollars in it, yet it claims it is underfunded, with about $80 billion in liabilities,” Lucido said. “According to the MCCA, this is the primary reason rates are rising and now it’s assessing $170 per vehicle this year. Our money is going into this fund, so we deserve to know how they are coming up with this number. What are they paying for? How are they paying it? How are they planning for the future? How long do they expect patients to live and at what costs? These are just some of the questions we need to know.”