to fight to
citizens of Michigan. Unfortunately for all
citizens of Michigan, the Court decision
was to allow only limited disclosure about
the fund to the public. This means that the
$20 billion fund is not open to the public
and in particular to the drivers that have
The good news is that our economy has
recovered, so that argument is now moot.
Instead of flat earnings or decline, the fund
has dramatically grown from $14-billion
when the attacks began in earnest, to
approximately $21-billion today. Yet, the
attacks to the No Fault program continue.
So, since the fund is now financially sound
and sustainability is no longer an issue,
what are the current attacks aimed at?
The answer is “fraud.” As we all know,
fraud has been the excuse used to attack
many institutions throughout this country.
There have been attempts to limit voting
access based on allegations of fraud. When
candidates want to tarnish an opponent’s
veracity, fraud is offered for public
consumption. This is an effective tactic to
The problem for consumers is that the
word fraud elicits guttural responses. No
one supports a fraudulent system. No one
questions the existence of fraud. Common
sense and historical examples tell us that
this has always been a part of society and
that someone, somewhere, given the
opportunity, will try to cut corners and
profit from fraud.
In my opinion, we have entered a new
period of robber barons, as in the past.
Powerful people use buzz words and the
media to pursue actions taking advantage
of a wary and the unsophisticated public.
Consumers in this country have to fight
to stay ahead of their financial pressures.
Most have neither the ability nor the desire
to analyze a complex insurance policy
contract, and they must trust the large
companies and the media to be fair and
honest with them.
It is time to look at the issue of fraud
and understand its impact on No Fault
In Michigan, as in every other State, there
are law firms that advertise their prowess
and success in litigating with insurance
companies. Recently I heard a Sam
Bernstein Law Firm commercial. This is an
ethical, consumer-driven and successful
law firm. They state that they have secured
over a billion dollars for their clientele. On
one hand, this is a fantastic achievement.
However, it also sends a strong message
that is often missed by consumers.
Why is it necessary to sue insurance
companies to force them to fulfill their
contractual obligations? This is one form
of fraud: not honoring a contract. Please
note that an insurance policy includes what
is called first and third party benefits, i.e.
medical care expenses and a monetary
award for personal pain and suffering.
A quick response from the insurance
industry would be that these are complex
cases and it is not easy to determine if
there is liability. Therefore they refrain
from paying on the cases until the courts
decide. Looking beyond the surface, what
is happening is they have calculated that
by denying claims until the courts compel
them to pay, they make more money
because they usually pay out less than
the contracted coverage. Also, they draw
income on the withheld funds and are
able to invest those funds for profit while
the cases are in litigation which may take
two to four years to get through the court
Therefore, the broader response is that
after billions of dollars have been paid to
plaintiff attorneys, the insurance companies
make even more money. What they have
fraudulently withheld from the consumers
is more than the monies they have paid out
to consumers through the legal system. In
other words, the industry profits from this
practice at the expense of consumers, who
are denied the coverage they contracted
for with the carriers.
In Michigan, as in other states,
we have an Insurance
a large agency
and the public
the premiums they pay will cover all their
needs related to automobile accidents.
This system is not working.
To repeat, the No Fault Program works
just fine. It is the insurance system that
is flawed. Twenty-five years ago, when I
started working in this field, if a consumer
called to complain about insurance delays
or fraud, the response was an immediate
review by agency staff. Back then, the
consumer protection agency was active,
consumer-oriented and effective.
Today, owing to budget cuts, policy
changes and apathy, these resources are
no longer available to aggressively steward
this agency. Instead, we have entered a
period of Caveat Emptor – buyer beware.
Therefore, consumers have no choice but
to put their trust and case in the hands of
In order to expose the fraud and
manipulation of our