Here are some  pictures from our cougar conference. (click on photos to see full size image.)

Mercury Insurance, the sponsor of the deceptive Prop 17, is pushing regulators to allow a $32 million rate increase for California drivers insured by the company and its affiliates. The company is quietly seeking the rate hike even as it is spending $10 million on a deceptive ad campaign trying to fool voters into believing that Prop 17 would lower car insurance costs.

Consumer Watchdog has challenged the proposed rate hike, saying the company has played fast and loose with data in an attempt to improperly raise rates and should actually be lowering prices by 11% for policyholders.

So, let me get this straight, Mercury Insurance is spending millions to try and convince voters that Prop 17 would lower premiums, while it’s working behind the scenes to jack up car insurance rates before the election. Wow.

If Mercury raises rates by $32 million, it would recoup every dime spent on its deceptive campaign for Prop 17, with policyholders picking up the tab. Nothing like taxing your customers to pay for increased profit margin.

Consumer advocates have slammed Mercury’s rate hike proposal as excessive and improper.

If approved as Mercury has proposed, the rate hike would force its insured drivers to pay an average of about $145 more than they should, based on Consumer Watchdog’s calculations.  The Department of Insurance has not made a decision on the proposal.

For more information, please visit: http://StopProp17.org org find us on twitter at: http://twitter.com/stopmercury and facebook at: http://www.facebook.com/stopprop17

The Company is supporting the Continuous Coverage Auto Insurance Discount Act (“Proposition 17”), a California ballot initiative which will be on the June 2010 ballot. If passed, Proposition 17 will provide for a portable persistency discount, allowing insurance companies to offer new customers discounts based on having continuous insurance coverage from any insurance company. Currently, the California DOI allows insurance companies to provide persistency discounts based on continuous coverage only with existing customers. While the company strongly believes this will be beneficial for the insurance consumer, there are consumer activist groups both supporting and opposing the initiative. The Company made financial contributions of $3.75 million, $0, and $3.5 million during April 2010, the first quarter of 2010, and 2009, respectively, related to this initiative. The Company expects to continue supporting the initiative with financial contributions.

A quick reading of this disclosure reveals three misleading statements:

1. Mercury is not simply “supporting” Proposition 17. Mercury wrote the initiative and has put in 99% of the more than $7.25 million that Mercury’s campaign committee has reported receiving (the rest comes from insurance agents). Perhaps because virtually all newspapers have editorialized against Proposition 17, Mercury’s management seems to be trying to put a little distance between itself and its creation. But in my mind, there is a major difference between “support” and “sponsorship.” I wonder how many shareholders would have preferred to be consulted by management before the company went ahead with this cynical multimillion-dollar boondoggle? The management plans to spend an additional amount – likely in the millions – between now and Election Day. Don’t they owe Mercury’s shareholders an estimate of how much more they plan to spend? Or perhaps the shareholders think that the surcharges Mercury will be allowed to collect under 17 will be good for the bottom line.

2. Mercury suggests that the California DOI is responsible for preventing the company from offering “discounts” that Proposition 17 would authorize. Wrong: it’s California law, which, since the passage of Proposition 103 in 1988, bars insurance companies from considering a person’s history of prior coverage when setting premiums. The voters prohibited the practice because it led to massive surcharges and more uninsured motorists on the road. Mercury got caught violating that law and was forced to stop doing so by the Insurance Commissioner and the courts.

3. Here’s a favorite: Mercury says, “there are consumer activist groups both supporting and opposing the initiative.” But legitimate consumer organizations like Consumer Watchdog and Consumers Union, the non-profit publisher of Consumer Reports magazine are all opposed to 17. Mercury has listed “Consumers First” and several other supposed “consumer groups” as supporting 17, but when researched and investigated by journalists, it turns out these organizations are either phony groups created by public relations firms or are run by spokespeople paid by Mercury.

Three more reasons why you can’t trust Mercury Insurance or Proposition 17.

This is the company that just a few weeks ago was accused by state regulators of overcharging its own customers and dozens of other violations of state insurance laws. That came on top of reports of previous investigations which concluded that the company routinely penalized people for such risky activities as working out of their own homes.

Mercury’s ad buy – now over $7 million – is timed to coincide with the beginning of absentee balloting. With virtually every newspaper in the state urging people to vote NO on 17, with no one but insurance agents appearing to defend Prop 17 against universal criticism by consumer and taxpayer advocates, Mercury apparently decided that deceit was the only alternative.  I don’t think it’s gonna work. Californians are instinctively suspicious when they start seeing slick thirty second ads promising lower insurance rates. Soon Mercury’s sponsorship will be discussed at office water coolers  and at dinner tables across the state. Then people will ask, “Since when does an insurance company spend millions to save me money?” The answer is obvious.

Every week, new editorials from newspapers across the state are urging their readers to vote against Prop 17.

San Francisco Bay Guardian: The Dangers of Prop 16 and 17

San Francisco Chronicle: Chronicle Recommends No on Prop 17

LA Daily News: No on Prop 17

San Jose Mercury News: Special Interest Prop 17 Won’t Benefit Drivers

Contra Costa Times: Contra Costa Times Urges Readers to Vote No on Prop 17

Jobvent.com is a site that allows employees to post and rate their experiences at their workplace anonymously. As I have posted in the past, Mercury’s ratings are beyond abysmal (and we hear that Mercury blocks the site from its employees). In reviewing the site, there are a lot of folks very unhappy with their time at Mercury. Thought I should share.

Here’s a review from a Mercury employee:

Mercury really likes to stick it to us! Screw your raises & bonuses. A nice blow to our hearts for the crappy reviews & raises. Absolutely never recommending anyone to get insurance from Mercury. In the long run you’ll just be screwed over.

And this insight from another employee:

I feel like a slave. Mercury is so demanding and demoralizing to work for. They suck your pride out of you and stomp on your efforts. They tie your hands together and then say WORK. I like my manager but the people above the manager get off on demoralizing the manager and making the manager out to be incompetent when that is not the case, all of this to make the higher ups feel good about themselves and their jobs. It seems like they need to put everyone else down to show the company that they are needed.

Oh lets talk about our merit increase. I attend additional classes and participate in voluntary programs to help the company out and when someone hates the adjuster and wants a new adjuster I get to clean up the mess. So after all the years I have been working here I no longer exceed I only meet requirements. Now I feel like when I am asked to do something above and beyond I should reply with “Clearly thats a job for someone who exceeds and I just meet requirements”. Don’t let them tell you everyone got 2% I know certain people a select few who got substantially more and some good workers got absolutely nothing as they are clearly on the way out since they don’t have their nose shoved up the managers arse.

Don’t get me started on the stupid survey- The only people who will take the time out to complete it are already pissed as it takes way too long. We work in insurance someone is at FAULT you cant make everyone happy when no one wants to be responsible for the accident not to mention they were in an accident. I dont know anyone who is happy to get in an Accident! We are instructed to raise our survey score but we are not told how we can get the # and if we don’t get our #’s up then the manager will be fired over something they have no control over.

Once the economy turns just a little all the good peeps will jump ship. I used to be proud of the company now I don’t want to associated with it. Mercury takes a strong stand at fighting bs law suits but some of our higher ups actually start bs law suits with other companys for personal gain. Seen 20/20 lately?

And another disgruntled employee:

Overall a crappy place to work. Terrible management. Hostile work environment with management “nazis” runnin’ around. They enjoy being jerks, and that is the part of the job they are good at. They know nothing about claims, except to harass you as you handle the work. Pay was not bad, but that is how they get you to come over, by promising the world. Then they pull the rug out from you.

Save yourself and your career and work for a good company in the insurance industry, like Firemens Fund, State Farm, or Chubb.

This Wednesday morning, two legislative committees will hold a joint hearing on Proposition 17, funded by Mercury Insurance. But it looks like Mercury’s Chairman George Joseph is not going to bother showing up for it.

The founder of Consumer Watchdog, Harvey Rosenfield, has challenged Joseph to attend the hearing in Sacramento to publicly defend his ballot initiative. Prop 17, which would allow insurance companies to raise premiums on drivers based on their history of buying auto insurance, is 99% funded by Mercury and a particular focus of Joseph’s decades long effort to evade accountability to consumers

Joseph has already spent $3.5 million on Prop 17 to advance his greedy cause. So what’s up George, why won’t you put your mouth where your money is?

Harvey Rosenfield wrote to Joseph late last week urging him to stop hiding behind his public relations flacks, front groups and radio ads and attend the hearing of the California Assembly Insurance Committee and Senate Banking, Finance and Insurance Committee to explain why voters in California should trust Mercury Insurance and its quest to enact Prop 17. In his letter to Joseph, Rosenfield points out that the insurance executive has privately defended his initiative in recent calls to several people who have spoken out against Prop 17. Now Joseph has an obligation to come forward and publicly defend this culmination of a decade-long attack on state consumer protections. Rosenfield writes:

The time has come for you to stop hiding behind your paid surrogates and defend your Captain Ahab-like quest to surcharge and discriminate against motorists before the public…This is not like one of those legislative hearings where you can do your dirty work through lobbyists and donations to the politicians. Will you be there to defend publicly what you are saying privately, or will it be another one of your flunkies who does your bidding? I’ll be waiting to see if you have the courage to face me and our publicly elected officials. If you don’t, sir, you have no business sponsoring a ballot measure in this state.

In the letter, Rosenfield notes state agency reports on Mercury’s history of discrimination, fines by state regulators and that Mercury ranks at the bottom of the most recent JD Power customer satisfaction survey: 27th of 32 large auto insurers.

Proposition 17 would create an insurance surcharge on drivers, including soldiers and seniors, who have had a lapse in car insurance coverage for virtually any reason during the past five years, or who missed a payment. Under the measure, people who stopped driving and didn’t need insurance for a time would be required to pay up to a $1000 more for car insurance when they sought to restart coverage. Currently, insurance companies are prohibited from imposing the surcharge in California. The initiative is opposed by consumer and citizen groups including Consumers Union, Consumer Watchdog, Consumer Federation of California, California Alliance of Retired Americans and VoteVets.org.

We were wondering if Joseph was going to step up after reading the letter, so earlier today I called Coby King, who serves as Mercury’s communications director, to ask if Joseph would be flying to Sacramento – but alas, no response.

More information at: StopProp17.org.

View a copy of the AG’s brief at: http://www.consumerwatchdog.org/resources/AGReplyBrief031010.pdf

• “The proponent’s arguments that the Attorney General cannot tell voters that this measure would allow insurance companies to increase the cost of insurance for certain drivers is without legal merit.”

• Propositon 17 “will allow insurance companies to increase cost of insurance to drivers who do not have a history of continuous insurance coverage.”

• “If the title and summary does not make voters aware that the measure will allow surcharges, voters will be misled into thinking that Proposition 17 simply allows insurers to offer a new discount.”

• “What is certain is that any company that decides to offer this new discount will be allowed to surcharge drivers who don’t qualify for it. And that is all the title and summary says. The fact that car insurance pricing is complicated should not prevent voters from being accurately and fully informed about the key components of Proposition 17.”

• “The proponent and opponents of Proposition 17, as well as the Department of Insurance, are all well aware that in the world of car insurance pricing, you cannot have a discount without a surcharge. The only people who probably are not aware of this principle are the voters.”

• “Proposition 17 provides that insurance companies may offer the new discount ‘[n]otwithstanding section 1861.02 (c)[.]’ The effect of this language is to ensure that companies will be allowed to impose surcharges as well as the new discount. Thus, contrary to the proponent’s suggestions, the actual language of Proposition 17 allows surcharges by waiving the statutory provision that would have prohibited them.”

Prop 17 opponent Harvey Rosenfield also filed a brief with the court in support of the Attorney General’s Title and Summary. That brief is available at: http://bit.ly/a2EziJ

This week, Harvey Rosenfield filed a lawsuit in Sacramento Superior Court urging the court to remove false and misleading statements that Mercury Insurance Company has made in its ballot arguments that will appear in the Official Voter Guide for the June ballot.

In the lawsuit, Rosenfield writes:

Mercury Insurance Company is attempting to put one over on the voters of California and this Court. Mercury and its surrogates are entitled to use the space allotted to them in the official Ballot Pamphlet to make the most persuasive case they can in support of the initiative…But the law does not allow Mercury to use the official Ballot Pamphlet to propagate false and misleading statements regarding either the terms of its proposed initiative or the state of existing law. And that is exactly what Mercury has done…

The 202-page lawsuit identifies numerous false and misleading statements made by Mercury’s ballot signers.  For example, responding to criticism of Prop 17 by military vets and USAA, an insurance company that serves the armed forces, Mercury claims in its argument that soldiers living stateside are exempted from Prop 17’s surcharges, and that California consumers are currently charged using the “continuous coverage” factor that Prop 17 is promoting. These assertions are false, as explained in a brief summary below.  The lawsuit can be downloaded here

So, while we are trying to get the facts to the voters, the Alliance of Insurance Agents of Brokers Executive Director Mike D’Arelli is trying his best to obfuscate the real goals of Mercury Insurance. In today’s Fresno Bee story on Rosenfield’s lawsuit, D’Arelli tries his best hand at defense, not by explaining why Mercury is lying to Californians, but, you guessed it, by attacking us.

It’s pretty pathetic when insurance agents actively work against the interests of their customers. Mike D’Arelli is doing a huge disservice to those he represents. We would say we were surprised, but we’re talking about a campaign that is sponsored by Mercury Insurance, an under-handed, dishonest and discriminatory company.

But facts are stubborn things, and Mr. D’Arelli can’t make Mercury’s lies go away by simply not addressing them.

We, on the other hand, are happy to go through Mercury’s lies in the ballot argument. Here are some of those misleading claims made by Mercury:

>  Impact on the military. Prop 17’s surcharge for drivers who have not had five years of continuous insurance coverage has a limited exception for only those soldiers who are “absen[t] from the United States while in military service.”  Soldiers serving the country on base in the states are not exempt, even though they might not need to have and pay for automobile insurance while on base.  Nonetheless, the Rebuttal Argument falsely claims that the ballot measure exempts soldiers who “cancel insurance when serving overseas or in another state” from its surcharges.  When Mercury sponsored SB 841 in 2003 to allow the same surcharge against California motorists, it included an exemption for soldiers serving in other states. But Prop 17 has no such protection for stateside soldiers.

> Current law. Prop 17 creates a new rating factor in order to circumvent the consumer protections of current law and surcharge many good drivers in California.  But throughout its ballot arguments, Mercury pretends that the new rating factor it proposes to create, “continuous coverage,” already exists under current law. The Argument in Favor of 17 states: “Under current law, drivers who have maintained auto insurance with the same company are eligible for a continuous coverage discount.” This is untrue. The language of Proposition 17 itself states that it creates a new rating factor “in addition to” and “[n]otwithstanding” current law. Mercury is falsely equating discounts for motorists who remain with the same company for a period of years, which are permitted under Proposition 103, with a new rating factor the company wants to use to base premiums on whether or not people can show they have been continuously insured by any company with no lapses over 90 days over a five year period and have had no missed payments. Mercury has made the same false statements in previous court cases, and the courts have consistently rejected Mercury’s effort to equate the two.

> Surcharges. Mercury’s ballot Argument in Favor claims that “Yes on 17 eliminates an existing surcharge for changing companies” and its Rebuttal says that Prop “17 would allow drivers to take your continuous coverage discount with you.” There is no existing surcharge for changing companies, and there is no existing “continuous coverage discount.” Mercury’s claims are false. Prop 17 would create a surcharge on good drivers who have not had five years of continuous auto insurance and would override Proposition 103’s ban on surcharges against the previously uninsured or those who have had a lapse in coverage, even if these motorists are good drivers.