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California: Mercury Insurance Hit with Huge Fine

Posted By Administration, Tuesday, January 20, 2015

Caption California Insurance Commissioner Dave Jones


California Insurance Commissioner Dave Jones hit Mercury Insurance with a huge fine for charging unapproved broker fees to consumers. Jones contends from 1999 to 2004 in spite of being advised by the department not to do so Mercurys agents charged broker fees.

Jones said Mercury did not have the department approval given to it by Proposition 103. It says auto insurance companies cannot charge excessive rates. The proposition requires department approval for all fees. 

And Mercury charged fees in 180,000 transactions.

Jones fined Mercury $27,593,562. The size of the fine has the insurance industry buzzing. The fine size was recommended by an administrative law judge who looked at the commissioners argument and Mercurys response.

Mercury auto insurance consumers paid $27.5 million in unapproved fees. While the $27.5 million fine against Mercury is significant, it is commensurate with the amount of money that was unlawfully collected from Mercury policyholders, Jones said.

Consumer Watchdog did an analysis of the 15-day proceeding and said the fees went from $100 to $150 per policy.

Mercury as you suspect vehemently disagrees with the commissioner and the judges decision. We strongly believe that this decision is contrary to Californias rate laws, due process and basic notions of fairness, the company said in a statement.

 

Source links: California Department of Insurance, Insurance Business America

Tags:  California: Mercury Insurance Hit with Huge Fine  Insurance Content  Insurance Industry  Insurance News  Weekly Industry News 

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