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Appeals court rules insurance fund can shield records

Michael Gerstein
The Detroit News

Lansing — The Michigan Court of Appeals has ruled that a state auto insurance fund is not subject to public records disclosure laws.

The appeals court said Tuesday that the Michigan Catastrophic Claims Association does not have to disclose records to the public as part of the Freedom of Information Act because lawmakers passed legislation exempting the public body from having to do so.

The insurance fund, created by the Legislature in 1978, is supposed to reimburse insurance companies for catastrophic losses paid in excess of $545,000.

In a 2-1 decision with appellate judges Stephen Borrello and Donald Owens signing the majority opinion, the court said that even though the insurance association is a public body it is still exempt from having to disclose public records.

Appellate Judge Elizabeth Gleicher wrote the sole dissenting opinion, arguing the public records law does not “extend blanket immunity from disclosure of public records to any specific ‘public body.’ ”

Gleicher wrote that the Legislature “inserted a brand new FOIA exemption into a portion of the Insurance Code” shielding it from records disclosure.

Borrello and Gleicher were appointed by Democratic Gov. Jennifer Granholm. Owens was appointed by Republican Gov. John Engler.

The ruling comes after the Michigan Supreme Court asked the appeals court to determine whether the association is subject to FOIA disclosure.

Drivers pay a fee of $160 per vehicle to the association in addition to their regular insurance rates so insurers can be reimbursed for potential catastrophic claims.

In 2012, the Coalition Protecting Auto No-Fault filed a lawsuit that argued the Catastrophic Claims Association is a public body and thus should have to disclose its records to the public.

Josh Hovey, a spokesman for CPAN, said the organization’s legal council is reviewing the decision and determining its next step.

“This case is about far more than auto no-fault insurance,” Hovey said in a Friday statement. “Yes, CPAN believes that having open access to the MCCA’s financial records is vital to understanding Michigan’s auto no-fault system. But at its core, this case has broad implications for the openness and transparency of Michigan’s government overall.”

The group said the ruling will make it easier for lawmakers to hide other exemptions to records requests in other statutes.


Twitter: @MikeGerstein