Mercury Insurance agrees to $1 million settlement for compliance violations
News: 2015 Press Release
SACRAMENTO, Calif. - Today Insurance Commissioner Dave Jones announced a $1 million settlement with Mercury Insurance Company, Mercury Casualty Company and California Automobile Insurance Company. This settlement stems from a regularly scheduled market conduct exam based on which the California Department of Insurance (CDI) found that Mercury violated California law more than 350,000 times based on more than 50 illegal rating and underwriting practices. In addition to the $1 million fine, Mercury agreed to business practice reforms.
"Market conduct exams help make sure insurers are fulfilling their obligation to consumers and following all insurance laws and regulations," said Commissioner Jones. "This routine market conduct exam of Mercury Insurance resulted in payment of a penalty and business practice reforms, and serves as an important reminder to all insurers to uphold commitments made to policyholders."
The Department found a range of unlawful violations across several lines of insurance. The exam concluded, among other things, that Mercury failed to provide reasons for non-renewals and cancelations, used unapproved and unfiled rates, failed to consistently follow their own rating and underwriting rules, and failed to make certain required disclosures in Spanish.
CDI conducts market conduct examinations of insurance companies to ensure the companies are complying with the California Insurance Code and the California Code of Regulations with respect to rating, underwriting and claim practices. Exams can be scheduled based on consumer complaint activity, special requests, or at regular intervals.
- This exam period was from 3/1/07 through 5/31/07.
- Notice of Noncompliance is available to the public.
- Stipulation and Consent Order is available to the public.
Led by Insurance Commissioner Ricardo Lara, the California Department of Insurance is the consumer protection agency for the nation's largest insurance marketplace and safeguards all of the state’s consumers by fairly regulating the insurance industry. Under the Commissioner’s direction, the Department uses its authority to protect Californians from insurance rates that are excessive, inadequate, or unfairly discriminatory, oversee insurer solvency to pay claims, set standards for agents and broker licensing, perform market conduct reviews of insurance companies, resolve consumer complaints, and investigate and prosecute insurance fraud. Consumers are urged to call 1-800-927-4357 with any questions or contact us at www.insurance.ca.gov via webform or online chat. Non-media inquiries should be directed to the Consumer Hotline at 800-927-4357. Teletypewriter (TTY), please dial 800-482-4833.