The insurer’s chairman and founder, George Joseph, is suing to stop the action of state regulators.
Regulators in California have ordered a reduction in homeowners insurance rates by Mercury Casualty Co., only to be contested by the insurer, which is refusing to comply with the ruling.
The order was to reduce the rates for the property coverage by an average of 8.2 percent.
The insurer, based in Los Angeles, is now arguing the order that was made by the state to reduce the rates that it has been charging. The decision was originally made following a public hearing and a number of other reviews that have been performed on the rates charged for homeowners insurance and the justifications that Mercury has provided for its prices.
The Commissioner’s goal was to make homeowners insurance coverage more affordable.
According to California Commissioner, Dave Jones, “The rate reduction provided for in this decision would offer much-needed financial relief for homeowners and would no doubt help consumers keep more of their hard-earned dollars in today’s tight economy.”
Jones had previously given approval to a decision that was made by a state administrative law judge, following a public hearing, in which a 7.3 percent rate increase by Mercury was rejected. The Commissioner called the increase request by the insurer “excessive”
When the announcement was made by the Commissioner, Mercury was not initially responding to any requests that were made for a comment on the subject. That said, the company did make legal filings in which it made the argument that its own “homeowners premiums are among the lowest in the state.” It contended that Jones had been relying on data that was outdated, as well as “incorrect legal and factual conclusions.”
The Commissioner has the power to reject or approve all rates for property and casualty insurance following Proposition 103, which was made into law in 1988 following voter approval.
Mercury has now filed a lawsuit against the Commissioner in Sacramento County Superior Court in order to remove his order to make reductions to the rates that will total $16.5 million for 270,000 homeowners insurance customers in California.
