Insurance Company in Hot Water Over Allegations of ‘Illegal Practices’ in California


State and federal legislators are urging a closer examination of an auto insurance firm which may have involved itself in illegal practices.

Mercury Insurance Group was mentioned in a California state report which suggests that the company engaged in discrimination against customers serving in the military (and individuals from other occupations) and ‘deceptive pricing.’

Steve Poizner, State Insurance Commissioner, reported that the Mercury may have ‘repeatedly violated’ Proposition 103. This proposition was passed in 1988 providing legal consumer protections.

The state report said that the insurer did not grant coverage immediately to certain applicants. These application included customers serving in the military, emergency vehicle operators, and artists.

Democrat Garden Grove Rep. Loretta Sanchez, also serving in the House Armed Services Committee, expressed that she is concerned that several policyholders in California may have been discriminated against and had to deal with higher premiums. She added that men and women in service should be celebrated, not penalized.

Sanchez said that the lawmaking body will do everything it can to make sure that necessary legal action will be pursued for the benefit and protection of veterans, soldiers, and other customers.

Democrat Sacramento Rep. Dave Jones said that the 275-page report is of great concern to the public since Mercury may have actually resorted to ‘bait and switch’ pricing which victimized people belonging to certain industries. However, the lawmakers maintained that objectivity should be pursued in further examinations.

Democrat South Gate Rep. Hector De La Torre said that they have noticed disturbing patterns in the way that Mercury has done business. He urges the Department of Insurance to take measures to control and remedy the situation.

Earlier this month, Mercury dismissed the allegations and accused consumer groups of brining up old allegations and misleading their customers.

The company, in a statement, said that a lot of what is charged against them has no basis and no merit. They insist that they continue to provide the best auto insurance value and service possible.

Advocacy group Consumer Watchdog urged Joint Chiefs of Staff Chairman Navy Adm. Mike Mullen to look into the issue. The advocacy group claims that Mercury may actually be discriminating against those personnel working for the military who support Proposition 17 on the June California ballot. ‘Prop 17’, also called the ‘Continuous Coverage Discount Initiative,’ intends to usher in benefits for millions of policyholders.

Californians for Fair Auto Insurance Rates, another advocacy group, supports the ‘Prop 17’ initiative, along with the Republican Veterans Association and the American GI Forum. The measure would also lower expenditures for those working in the military, and other state consumers as well.