| Return Reference | Explanation |
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| FORM 990, PART III, LINE 1 | MICHIGAN CATASTROPHIC CLAIMS ASSOCIATION ("MCCA") WAS ESTABLISHED BY PUBLIC ACT 136 OF 1978, WHICH AMENDED THE NO-FAULT LAW BY ADDING SECTION 3104 EFFECTIVE JULY 1, 1978. THE LEGISLATURE CREATED MCCA BECAUSE SMALLER INSURANCE COMPANIES HAD DIFFICULTY OBTAINING REINSURANCE FOR MICHIGAN'S AUTOMOBILE NO-FAULT POLICIES, WHICH PROVIDED FOR UNLIMITED LIFETIME MEDICAL BENEFITS FOR PEOPLE WHO ARE CATASTROPHICALLY INJURED IN AUTO ACCIDENTS. THE MCCA IS AN UNINCORPORATED NON-PROFIT ASSOCIATION OF WHICH EVERY INSURER THAT SELLS AUTOMOBILE OR MOTORCYCLE COVERAGE IN MICHIGAN IS REQUIRED TO BE A MEMBER. THE MCCA IS FUNDED BY AN ANNUAL PREMIUM ASSESSMENT TO ITS MEMBER INSURANCE COMPANIES BASED ON THE NUMBER OF POLICIES COVERING AUTOMOBILES AND MOTORCYCLES WRITTEN IN MICHIGAN. THE MCCA IS REQUIRED TO ASSESS AN AMOUNT EACH YEAR THAT IS SUFFICIENT TO COVER THE LIFETIME CLAIMS OF ALL PERSONS CATASTROPHICALLY INJURED IN THAT YEAR AND IN ADDITION, MAY ADJUST FUTURE ASSESSMENTS FOR EXCESSES OR DEFICIENCIES IN PRIOR ASSESSMENTS. THESE ASSESSMENTS PROVIDE FUNDS FOR THE INDEMNIFICATION OF THOSE MEMBERS AGAINST ULTIMATE LOSS SUSTAINED UNDER STATUTORY REQUIRED PERSONAL PROTECTION INSURANCE IN EXCESS OF THE APPLICABLE AMOUNT SET FORTH IN SECTION 3104(2) OF THE MICHIGAN INSURANCE CODE. BEGINNING JULY 1, 2002, AS A RESULT OF THE ENACTMENT OF PUBLIC ACT 3 OF 2001, THE MEMBER RETENTION LEVEL INCREASED FROM $250,000 TO $300,000 AND THEN GRADUALLY INCREASED ON AN INCREMENTAL BASIS OVER A TEN-YEAR PERIOD UNTIL A $500,000 LEVEL WAS REACHED ON JULY 1, 2011. THEREAFTER, BEGINNING JULY 1, 2013, THE RETENTION WILL BE INCREASED EACH ODD NUMBERED YEAR BY 6% OR THE CONSUMER PRICE INDEX, WHICHEVER IS LESS. THE MEMBER RETENTION LEVEL FOR THE PERIOD JULY 1, 2021, THROUGH JUNE 30, 2023, IS $600,000, AND THE MEMBER RETENTION LEVEL FOR THE PERIOD JULY 1, 2023, THROUGH JUNE 30, 2025, IS $635,000. AS OF JUNE 30, 2024, THE MCCA'S ASSETS OF $22.448 BILLION WAS LESS THAN ITS THEN ESTIMATED LIABILTIES OF $24.545 BILLION, RESULTING IN AN ESTIMATED DEFICIT OF $2.097 BILLION. |
| FORM 990, PART VI, SECTION A, LINE 6 | THE ASSOCIATION IS A PRIVATE UNINCORPORATED NON-PROFIT ASSOCIATION OF WHICH EVERY INSURER THAT SELLS AUTOMOBILE OR MOTORCYCLE COVERAGE IN MICHIGAN IS REQUIRED TO BE A MEMBER. |
| FORM 990, PART VI, SECTION A, LINE 7B | CHANGES TO THE MCCA PLAN OF OPERATION REQUIRE APPROVAL OF THE STATE OF MICHIGAN DIRECTOR OF THE DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES AND A MAJORITY VOTE OF THE MEMBER COMPANIES. |
| FORM 990, PART VI, SECTION B, LINE 11B | AN INDEPENDENT PAID PREPARER PREPARES FORM 990, WHICH IS THEN REVIEWED BY MANAGEMENT. UPON COMPLETION OF THE REVIEW PROCESS, AN ELECTRONIC COPY IS MAILED TO THE AUDIT COMMITTEE CHAIR, GENERAL COUNSEL AND TO THE CHAIR OF THE BOARD OF DIRECTORS. OTHER DIRECTORS MAY REQUEST A COPY OF THE FORM. |
| FORM 990, PART VI, SECTION B, LINE 12C | ALL EMPLOYEES, BOARD MEMBERS AND STANDING COMMITTEE MEMBERS ARE REQUIRED TO COMPLETE A CONFLICT-OF-INTEREST DISCLOSURE STATEMENT ANNUALLY. IN THE EVENT THAT A CONFLICT OF INTEREST ARISES, FOR A DIRECTOR, STANDING COMMITTEE MEMBER OR EMPLOYEE, THAT INDIVIDUAL IS REQUIRED TO PROMPTLY INFORM THE EXECUTIVE DIRECTOR OF THE MCCA. IN THE EVENT THAT AN ACTUAL OR POTENTIAL CONFLICT ARISES FOR THE EXECUTIVE DIRECTOR, THAT INDIVIDUAL IS REQUIRED TO PROMPTLY INFORM THE CHAIR OF THE BOARD OF DIRECTORS OF THE MCCA. ANY REPORTED CONFLICTS ARE REVIEWED BY THE EXECUTIVE DIRECTOR, THE CHAIR OF THE AUDIT COMMITTEE, AND THE CHAIR OF THE BOARD OF DIRECTORS, AND A RECORD IS KEPT OF EACH CONFLICT WHEN THE INTEREST BECOMES SUBJECT TO AND REQUIRES ACTION. ADDITIONALLY, ALL DIRECTORS ARE REQUIRED TO RECUSE THEMSELVES FROM ANY BOARD ACTION OR DECISION THAT INVOLVES THEIR COMPANY OR PERSONAL INTERESTS, INCLUDING NOT VOTING ON THE MATTER, NOT TAKING ACTION AND NOT USING PERSONAL INFLUENCE ON THE MATTER. |
| FORM 990, PART VI, SECTION B, LINE 15 | A HUMAN RESOURCES CONSULTANT IS RETAINED ON AN AS NEEDED BASIS TO VALIDATE THE MARKET SALARY RANGES FOR EACH POSITION. THE MCCA HR COMMITTEE REVIEWS THE DATA AND MAKES A RECOMMENDATION OF ANY ADJUSTMENTS THAT THE FULL BOARD OF DIRECTORS DISCUSSES AND VOTES ON. IN ADDITION, ON AN ANNUAL BASIS, THE HR COMMITTEE REVIEWS NATIONAL COMPARABILITY DATA REGARDING THE AVERAGE SALARY RANGE AND MERIT INCREASES AND MAKES A RECOMMENDATION THAT THE FULL BOARD OF DIRECTORS DISCUSSES AND VOTES ON. |
| FORM 990, PART VI, SECTION C, LINE 19 | THE MCCA'S FORM 990 AND CONFLICT OF INTEREST POLICY ARE AVAILABLE UPON REQUEST. THE MCCA'S GOVERNING DOCUMENTS (THE STATUTE THAT CREATED THE MCCA AND THE PLAN OF OPERATION) AND THE FINANCIAL STATEMENTS ARE AVAILABLE ON THE MCCA'S PUBLIC WEBSITE. |
| FORM 990, PART IX: | FOR LINE 22, DEPRECIATION, MCCA IS REFLECTING NEGATIVE EXPENSES DUE TO THE CHANGE IN UNALLOCATED LOSS ADJUSTMENT EXPENSE RESERVES FROM FISCAL YEAR 2023 TO FISCAL YEAR 2024 IN WHICH THE DECREASE IN UNALLOCATED EXPENSE RESERVES WAS GREATER THAN THE AMOUNT PAID IN FISCAL YEAR 2024. |
| FORM 990, PART XI, LINE 9: | SURPLUS DISTRIBUTION TO MEMBERS -64,880. CHANGE IN NONADMITTED ASSETS 2,393,036. CHANGE IN UNRECOGNIZED PENSION LIABILITY 128,948. STAT BASIS ADJUSTMENT -4,609,824. |
| FORM 990, PART IV, LINE 12 AND PART XII, LINE 2B: | THE ORGANIZATION RECEIVED AN AUDITED FINANCIAL STATEMENT FOR THE YEAR FOR WHICH IT IS COMPLETING THIS RETURN THAT WAS PREPARED IN ACCORDANCE WITH STATUTORY ACCOUNTING PRACTICES AS PRESCRIBED OR PERMITTED BY THE STATE OF MICHIGAN'S DEPARTMENT OF INSURANCE AND FINANCIAL SERVICES. PRESCRIBED STATUTORY ACCOUNTING PRACTICES INCLUDE THE NATIONAL ASSOCIATION OF INSURANCE COMMISSIONERS' STATEMENTS OF STATUTORY ACCOUNTING PRINCIPLES, AS WELL AS STATE LAWS, REGULATIONS AND GENERAL ADMINISTRATIVE RULES. PERMITTED STATUTORY ACCOUNTING PRACTICES ENCOMPASS ALL ACCOUNTING PRACTICES NOT SO PRESCRIBED. |
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