The chairman of the Senate Insurance Committee is defending L.A. Insurance’s sale of seven-day auto insurance in Michigan, blaming a possible administrative ban of the policies on “one bureaucrat out to get them.”
Sen. Joe Hune, R-Hamburg Township, said the ongoing review of the legality of L.A. Insurance’s seven-day policies that were approved for sale in 2011 was prompted by Randall Gregg, general counsel of the Michigan Department of Insurance and Financial Services.
“I think it’s one bureaucrat out to get them. He’s got a bug up his ass about it,” Hune said about Gregg.
The state insurance department has put Integon Insurance Co. on notice that it may disallow the seven-day policies L.A. Insurance sells for the North Carolina-based carrier.
Gregg declined to comment through a department spokeswoman, who noted the agency is not dealing directly with L.A. Insurance.
“I want to make it clear that the Notice of Withdrawal of Approval is directed to Integon, not LA Insurance, and that no one at the department has an axe to grind with L.A. Insurance,” Andrea Miller, communications director for the insurance department, wrote in an email to Crain’s.
State insurance regulators have been mum about their review of the legality of seven-day plans since Crain’s first reported March 31 that the department may administratively ban the short-term policies.
DIFS informed Integon on March 15 that the state would no longer allow the sale of seven-day insurance plans in Michigan starting April 15. That ruling has been put on hold, pending a review by insurance department Director Patrick McPharlin.
Crain’s reported this week on how drivers, particularly in Detroit, buy seven-day “Jump Start” plans from L.A. Insurance for the sole purpose of getting their vehicle license plates registered or renewed — and then drive without insurance for the rest of the year.
Hune specifically defended L.A. Insurance CEO Anthony Yousif, whose Royal Oak-based company has 30 franchise stores selling seven-day insurance plans in Detroit. “He’s selling a legal product, and all of a sudden state government comes in and says ‘No, it’s not legal anymore,’ without any elected official having any say in it,” Hune said.
Yousif has been a reliable contributor to Hune’s campaign account in recent years, donating six checks totaling $5,150 since 2014, state records show. Since 2014, Yousif has contributed $35,600 to the campaign coffers of 29 state legislators or their leadership committees, a Crain’s analysis of contribution data shows.
“I am a campaign contributor, but to be honest, I don’t know if it helps me or hurts me,” Yousif told Crain’s on Tuesday. “It gives me access. I can go and plead my case.”
Yousif said his campaign contributions pale in comparison to hospitals, attorneys and insurance carriers wrapped up in the no-fault auto insurance system. “I’m a small dollar compared to what’s going on out there,” he said.
Yousif said he’s had no direct contact with Gregg because his carrier, Integon, is dealing directly with state insurance regulators.
Hune has long advocated for reining in Michigan’s unlimited medical benefits for auto accident victims.
He said Tuesday that L.A. Insurance is being unfairly targeted by the state insurance department, while policymakers aren’t addressing the cost of insurance that drives motorists to buy seven-day plans in the first place.
“We have an affordability issue in so many urban areas — and that’s the problem,” Hune told Crain’s. “That’s what has created the short-term policies, and it wouldn’t exist if the Legislature would address affordability in auto insurance.”
Hune added: “Some folks have no choice but to pay by the week or pay by the month because it’s just so damn expensive.”