Mercury Insurance Company finally settled its two decades long legal fight with California over its alleged unlawful business practices.
The insurer agreed to pay a record $41 million, the largest property and casualty payment in the history of the California Department of Insurance.
The settlement included $27.6 million in penalty plus more than $8.1 million in interest and $5.4 million to resolve a second part of the complaint against Mercury Insurance, which was not yet tried in court.
In a statement, Insurance Commissioner Ricardo Lara, said the settlement shows the tenacity of the Department of Insurance team who won this in court and kept the pressure on Mercury, which profited by skirting the law and taking advantage of consumers.”
He added, “This was a hard fought legal battle to protect consumers, defend Proposition 103 and make sure all insurers play by the rules in California. No insurance company is above the law.”
Allegations against Mercury Insurance
The Department of Insurance accused Mercury Insurance of noncompliance to certain regulations after it discovered that it was avoiding requirements under Proposition 103. The state regulator found out about the insurer’s scheme in 1998.
