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Aug 26, 2002
CONTACT: Doug Heller - 310-392-0522 x309
Portrait of a Sacramento Lube Job
Mercury Insurance Greases the Wheels for Anti-Consumer BillSanta Monica--A Los Angeles based auto insurance company, facing lawsuits and a crackdown by the state's insurance commissioner for violating a voter-approved law, has decided it would be cheaper to pay off the legislature to change the law and legalize its wrongdoing.
State records show that Los Angeles-based Mercury Insurance, led by CEO George Joseph, has spent $1,077,550 million to state lawmakers and candidates since 2000, when it first began its assault on Section 1861.02(c) of the Insurance Code. That law forbids insurance companies from surcharging motorists who are buying insurance for the first time or have suffered a lapse in coverage. Mercury and other insurers are being sued for systematically violating this law, which was enacted as part of voter-approved Proposition 103, and the Insurance Commissioner has issued new rules to prevent insurers from future violations.
To avoid civil liability and potential fines, Mercury is sponsoring legislation to effectively repeal 1861.02(c) and legalize its current practices. Mercury's first attempt went nowhere last year. Using Senator Don Perata (Oakland) as its campaign leader, Mercury tried to gut and amend a bill in the Senate Insurance Committee on June 20, but this effort failed as well. The bill was defeated after the Insurance Commissioner's office testified that the bill had no actuarial validity. Desperate, Mercury/Perata have now hijacked another Perata bill, this one before the Assembly, in the hope of avoiding the Senate Insurance Committee. The Assembly is expected to vote on the measure shortly.
Data from the Secretary of State's office shows that:
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