CA Regulator Reports Proposition 17 Sponsor Mercury Insurance Overcharged and Discriminated Against Drivers for 15 Years, Failed to Give Discounts Owed

SANTA MONICA, Calif., April 12 /PRNewswire-USNewswire/ -- The California Department of Insurance (CDI) today said that Mercury Insurance Company, the sponsor of Proposition 17, has overcharged and discriminated against California customers for over fifteen years, including failing to deliver discounts required by state law and imposing unlawful surcharges.Consumer advocates said that the new CDI report is certain to affect voters' view of Proposition 17, Mercury's controversial initiative on the June ballot. "This troubling report shows that Mercury Insurance has overcharged its policyholders for a decade and half, but now it wants the voters to believe it is spending millions on Proposition 17 to charge less for auto insurance," said Harvey Rosenfield, author of insurance reform Proposition 103 and founder of Consumer Watchdog. "These new revelations show Mercury Insurance's promise that Proposition 17 will lower premiums is like Bernie Madoff backing a ballot proposition to protect investors."CDI announced that it filed an administrative lawsuit against Mercury last Friday and gave it ten days to correct every violation of law identified in its investigation or face massive fines. The lawsuit and underlying investigation can be downloaded at: http://bit.ly/afestjIn its latest investigation, which began in March, 2007, CDI found that Mercury improperly applied surcharges to its customers, failed to give customers the discounts they were due, discriminated against people with certain medical conditions, and refused to insure applicants based on their occupation. The Department also determined that Mercury had violated its own agreement to stop violations that were uncovered by CDI investigations completed in 1998 and 2002. More information about those investigations is available here: http://www.consumerwatchdog.org/insurance/articles/?storyId=32615"How can voters trust an insurance company that violated its own promise to regulators to stop breaking the law?" Rosenfield asked. "This report should be the nail in Prop 17's coffin. Voters won't stand for a lying insurance company deceiving them once again."Mercury wrote, and has spent $3.5 million on, Proposition 17 on the June ballot, which would allow insurance companies to add a new surcharge on drivers' premiums based on whether or not they previously purchased auto insurance, even if they didn't drive, or missed an insurance payment. The company's commercials are telling people that Prop 17 would lower auto insurance premiums.Among the 54 practices identified by the CDI in today's report as potential violations of state law are numerous practices that violate Proposition 103, the 1988 voter approved insurance reform measure that Mercury's Proposition 17 targets.Among the practices uncovered by state investigators: