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Newly Discovered MCCA Documents Underscore Need for Auto No-Fault Transparency

May 1, 2013

LANSING – Recently discovered IRS filings reveal disturbing facts about the management of the Michigan Catastrophic Claims Association, the Coalition Protecting Auto No-Fault announced today. The documents include IRS 990 forms showing that the MCCA keeps funds in a bank in the Cayman Islands.

“It’s no wonder insurance company executives want to keep the MCCA out of the public eye,” said CPAN spokesperson John Truscott. “If they’re keeping Michigan drivers’ money in off-shore foreign bank accounts, what else might they be hiding? The more public information we find, the more concerned we are about what sort of secrets the auto insurance industry has been hiding from rate payers.”

The 990 forms are tax return statements filed by nonprofit organizations. When comparing the MCCA’s 2008 tax filing to its 2010 data, CPAN found that the MCCA’s top executives received an 19.1 percent compensation increase during the height of the worst economic recession in generations. The combined total compensation for its top employees listed on the MCCA’s 990 was $306,591 in 2008, compared to $365,248 in 2010.

The 990 forms also reveal that the MCCA is paying millions of dollars in consulting fees to investment management companies – upwards of $10 million per year.

When reviewing this information, CPAN president John Cornack was outraged.

“First the insurance companies doled out pay increases to employees at a time when Michigan citizens were receiving pay cuts and layoffs, then it raised the assessment to historic levels while at the same time paying out millions for financial management advice – which must have been bad advice, if they are claiming to be broke. And to add insult to injury, they are now trying to take away drivers benefits in exchange for a measly $10 a month off their premium? It’s appalling,” said Cornack.

Cornack noted that while this type of information, while publicly available, further underscores the need for complete transparency because it does not cover the information needed by the public to determine whether the economic forecasts and actuarial assumptions are reasonable and justified.

Michigan’s auto insurance system is regarded by many as a model insurance system for the nation. It provides quality care while maintaining reasonable costs. CPAN members have argued that legislators must determine whether the insurance industry’s argument of MCCA alleged financial distress is valid.

The Ingham County Circuit Court ruled the MCCA should disclose its financial records under the Freedom of Information Act. The insurance industry is attempting to reverse this ruling in the Michigan Court of Appeals.


About The Coalition Protecting Auto No-Fault: The Coalition Protecting Auto No-Fault is a broad-based coalition of consumer advocate groups, lawyers, doctors, hospitals and other health care providers working together to keep Michigan’s model no-fault insurance law intact. Learn more at

Contact: John Truscott, 517-487-9320


216 North Chestnut Street
Lansing, MI 48933
Phone: (517) 882-1096
Fax: (517) 882-0879

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