Michigan auto insurers must issue $400 refunds by May 9, gov's office says

Lansing — Auto insurance companies will have to issue $400 refunds to Michigan customers by May 9, according to an announcement Monday from Gov. Gretchen Whitmer's administration.

Last week, the Michigan Catastrophic Claims Association detailed plans to refund state drivers $400 per vehicle with checks coming in the second quarter of 2022.

On Monday, the Department of Insurance and Financial Services released a bulletin, instituting a timeline for the process, and launched Michigan.gov/MCCArefund, a website to provide information about the refunds.

"I am pleased with how quickly the plan was developed and appreciate the clear guidance provided both to insurers and consumers," Whitmer said Monday. "The bulletin and website lay out the timeline and requirements so that insurers understand that they must process the refunds as quickly as possible, and Michiganders know when and how they will get the surplus money they are owed."

In November, the Democratic governor called on the MCCA to issue refund checks to distribute its $5 billion surplus. Under state law, the MCCA levies an assessment each year to cover claims for those catastrophically injured in car accidents.

The organization's analysis found that about $3 billion of the surplus could be returned to policyholders. The MCCA sought "to issue the largest possible refund to policyholders while maintaining sufficient funds to ensure continuity of care," said a letter from Kevin Clinton, the association's executive director.

The surplus funds will be turned over by the MCCA to insurance companies operating in Michigan by March 9, and the insurers will be responsible for issuing checks to eligible policyholders, according to the governor's office.

Under the new bulletin, the companies will have 60 days to provide refunds by check or deposit to consumers. The Department of Insurance and Financial Services "expects that insurers will pass through the returned surplus to policyholders directly in a single, lump-sum amount of $400 per vehicle and $80 per historical vehicle," the new bulletin said.

Money will go to every Michiganian with an auto insurance policy in force as of 11:59 p.m. Oct. 31.

The MCCA's surplus grew from $2.4 billion at the end of 2020 to $5 billion as of June 30. The estimated surplus resulted savings from reforms to 2019 Michigan's no-fault insurance law and higher than projected investment returns.

cmauger@detroitnews.com