Fourth District Court of Appeal justices Tuesday overturned an Orange County Superior Court judge’s ruling striking down $27 million in penalties imposed by former Insurance Commissioner Dave Jones against Mercury Insurance for broker fees he found were improperly added to rates.
“After over a decade of battling against Mercury’s aggressive litigation tactics seeking to evade accountability for its deceitful broker fee overcharges, today justice has finally prevailed and the $27 million civil penalty Mercury must pay the state should send a strong message to Mercury and other insurers that they can’t get around the law,” said Pam Pressley, an attorney for Consumer Watchdog, which intervened in the lawsuit filed by Mercury to overturn the Insurance Commissioner’s penalty.
Mercury officials did not immediately respond to a message seeking comment on the ruling.
After the penalties were levied, Orange County Superior Court Judge Gail Andrea Andler reversed the insurance commissioner’s punishment. Andler found that the disputed “broker fees” were not a premium as the commissioner ruled “because they were charged for separate services,” the appellate justices wrote in their ruling.
Mercury was charging rates not approved by the state Department of Insurance, the insurance commissioner ruled.
The rates “were in the form of broker fees charged by Mercury agents, which should have been disclosed as premium,” the commissioner concluded, according the appellate court ruling.
The justices found that “there was substantial evidence supporting the commissioner’s decision,” so reversing for a new hearing “would be an idle act and we therefore remand with directions for the court” to deny Mercury’s request to overturn the penalties.
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