Well, this might surprise everyone. Governor Whitmer just asked the Michigan Disaster Claims Association (MCCA) to send refund checks to all of us who pay for auto insurance.
Before you get too excited about Whitmer's call for a refund and give her any trust, there is more to the story. Michigan’s “insurance law requires MCCA to begin in September 2022 and issue refunds every three years thereafter when assets exceed 120% of liabilities”.
MCCA is currently sitting on $27 billion in cash. They have accumulated funds through our auto insurance surcharges over the years. The fund is controlled by a non-profit company, its executive director is Kevin Clinton, and the board of directors is controlled by the insurance industry.
The Lansing State Daily reported on a letter submitted by Whitmer to Mr. Clinton in which it stated that as of June 30, 2021, MCCA had a surplus of approximately US$5 billion. Interestingly, Illinois’s surplus has increased from $2.4 a year ago. How did this fund accumulate such a large surplus in such a short period of time?
In the press release, Whitmer said:
"The surplus of more than $5 billion accumulated by MCCA belongs to Michigan people and should be put into people's pockets through refund checks immediately"
Who knows how much surplus they will return?
If they decide to return the entire $5 billion surplus, each Michigan insured vehicle will receive an average of about $676 in checks per vehicle. Try to determine how much refund you can get and have fun. There are approximately 7.4 million insured vehicles in Michigan.
Who decides how much Michigan can get back? That will be the one who controls the MCCA fund. Executive Director Kevin Clinton said yesterday that “the fund’s current assets do exceed its expected liabilities by $5 billion, but he said that giving up the entire surplus “may be a difficult thing”.
Mr. Clinton then stated that if they comply with the 120% liability law, each insured vehicle will only receive a refund of US$743 million or a refund check for approximately US$100.
Governor Whitmer knows that the law provides for a surplus of 120%, so why does she demand that the entire $5 billion be returned to the people? Because it is completely political, she is trying to use other people's money to buy people's votes.
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