May 9, 2019—A California Court of Appeal recently upheld a $27.5 million fine that the California Department of Insurance issued against Mercury Insurance Co. for charging illegal fees that should have been disclosed as premiums, a violation of Proposition 103, reported Insurance Journal. Prop 103, passed by voters in 1988, prevents auto insurers from charging excessive rates and requires that rates be approved by the commissioner.
The fine is reportedly the largest in the CDI’s history against a property/casualty insurer.
The insurance commissioner fined Mercury $27.5 million in 2015 for charging consumers unapproved and unfairly discriminatory rates. Despite being advised against doing so by the CDI, Mercury continued to allow its auto insurance agents to charge consumers $50 to $150 in fees on top of the premium the CDI approved, according to the report.
