California Insurance Commissioner Dave Jones ordered Mercury Insurance to pay a fine of $27.5 million because Mercury auto insurance consumers were allegedly charged unapproved broker fees.
Mercury did not obtain Jones’ approval for the fees and so consumers paid more than the rates approved by the commissioner.
Proposition 103, passed by voters in 1988, prevents auto insurers from charging excessive rates and requires that rates be approved by the commissioner.
Despite being advised against doing so by the California Department of Insurance, from 1999 through 2004, Mercury’s insurance agents allegedly charged and collected unapproved broker fees on more than 180,000 transactions, improperly collecting $27.5 million from consumers.
Jones’ decision followed an evidentiary hearing conducted by an administrative law judge.
The judge found that there were at least 180,000 transactions in which Mercury auto policyholders were charged fees that had not been approved.
Topics California Agencies
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