Mercury Originally Sought $32 Million Hike, But Was Required to Decrease Rates In Compliance With Proposition 103
SANTA MONICA, Calif., Dec. 9, 2010 /PRNewswire-USNewswire/ -- Mercury Insurance's approximately $72 million rate cut for California drivers today comes despite the company's original plan to hike premiums. The price cut is the result of the California Department of Insurance's refusal to allow Mercury Insurance to raise rates by approximately $32 million, as it had proposed in 2008. At the time, the nonprofit Consumer Watchdog challenged the insurance giant's proposed hike as a violation of California's landmark insurance reform Proposition 103.
"Based upon its initial analysis ... the Commissioner should reject the requested increase, order a rate decrease in compliance with the regulations, and take such further corrective action as deemed necessary," Consumer Watchdog wrote the Department of Insurance in 2008. Mercury is now implementing the rate cut demanded by the Department of Insurance and consumer advocates.
"Mercury is lowering rates today only because regulators blocked the insurance company from gouging customers as it originally planned," said Consumer Watchdog Executive Director Doug Heller.
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SOURCE Consumer Watchdog