LANSING – The assessment paid by auto insurance customers to the Michigan Catastrophic Claims Association will increase 6 percent on July 1, 2013 through June 30, 2014, the association announced on Wednesday.

The increase is $11 more than current rates, or $186 per insured vehicle, and represents $156.44 to cover anticipated new claims, $29.12 to address a $2 billion estimated deficit related to existing claims and 37 cents for administrative expenses, the MCCA said.

The Coalition Protecting Auto No-Fault slammed the announcement.

“Here we are again, hit with a secretive rate increase that consumers can do nothing about,” CPAN president John Cornack said in a statement. “This fund is controlled entirely by insurance companies, its meetings are closed to the public and its rate setting information is completely closed off from public scrutiny – and that’s exactly why CPAN brought a FOIA lawsuit against the MCCA.”

The latter of Mr. Cornack’s statement cites a ruling by the Ingham County Circuit Court deciding “Michigan citizens have a right to know how the insurance premium they pay is calculated to ensure that no-fault insurance is provided on a fair and equal basis.”

The MCCA filed an appeal but the judge in the case refused to suspend his ruling pending the appeal, saying the only thing the plaintiffs sought was information about the MCCA rate determination process, CPAN said.

The increase also comes at a time when some are calling for the dissolution of the association, established to cover the cost of personal injury protection benefits under the state’s no-fault insurance law. PIP coverage is mandatory and provides for the payment of unlimited, lifetime medical auto insurance benefits that are reflected in the insurance premiums all policyholders pay.

The assessments are used to reimburse auto insurance companies for PIP benefits paid in excess of $530,000 per claim. The group said it paid out $947 million – more than $135 per insured car – in 2012 for claim costs resulting from catastrophic injuries.

“Independent actuarial consultants evaluate expectations for medical cost inflation, economic conditions, investment returns and the number of claims presented to the MCCA,” the group said in a statement. “The MCCA Actuarial Committee recommends to the MCCA Board of Directors the annual assessment. It is adjusted for fund surpluses or deficiencies from earlier assessments.”

Currently, the MCCA has a $2 billion deficit, representing slightly more than $300 per insured vehicle, it said.

Rep. Pete Lund (R-Shelby Township), chair of the House Insurance Committee, again called for the Legislature to do something to try to lower the cost of auto insurance in the state in lieu of the announcement by the MCCA.

“Auto rates are way too high in Michigan and now drivers are facing another set of rate-hikes due to the outdated statutory insurance mandate in our state,” he said in a statement. “This increase to the cost of coverage is triple the rate of inflation, adding to the already astronomical costs that every Michigan driver already pays for insurance. It is clear that that the only realistic solution to the problem is for the legislature to step in and do something in order to lower costs and to protect the taxpayers of Michigan.”

Lund also said the association “can’t remain solvent without constant rate-hikes” that burden families.

“We need to find better ways to protect Michigan taxpayers other than simply offering a one-size-fits-all insurance mandate that hits drivers with high rates and then hits them again with rate-hikes when more funding is needed,” he said. “It is time that we find a way to give the hard-working taxpayers of Michigan peace-of-mind by offering affordable coverage while maintaining protection and coverage for those that face catastrophic situations.”

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