By Staff Writers, EAST COUNTY MAGAZINE (SAN DIEGO, CA)

Consumer advocates and major newspapers across the state are warning voters about deceptive arguments for a ballot measure, Proposition 17, backed by an insurance company. Mercury Corp. paid roughly $2.2 million for a professional signature gathering service to qualify the measure for the ballot and was responsible for 98% of funding for the “Yes on 17” campaign.

The Los Angeles Times observes that the initiative “would legalize practices Mercury has been fined for.” State regulators fined the insurer for violating Proposition 103, California’s landmark consumer protection law, by inappropriately cancelling policies and limiting access to preferable policies and rates.

The initiative would allow car insurance companies to offer a “continuous coverage” discount to new customers who switch from one insurance company to another. But it would also give insurers free reign to jack up rates dramatically for anyone whose insurance lapses for 90 days—such as drivers who are hospitalized for an extended period, active duty military, or people who have lost jobs and can’t afford premiums.

Proponents argue that the initiative would increase competition, leading to lower rates and reduced premiums, while offering consumers more choices in coverage. Opponents say those arguments are deceptive. Harvey Rosenfield, author of Prop 103, filed a lawsuit in Sacramento County Superior Court asking to have “false and misleading” statements made by the Yes on 17 campaign removed from voter guides. Those statements include a claim that soldiers living in the U.S. are exempt fro the surcharge, and a claim that Californians are already charged using continuous coverage factor that the proposed initiative would create. Rosenfield’s lawsuit chares that the surcharge Mercury wants voters to approve is currently illegal.

The initiative’s title, Continuous Coverage Discount Initiative, is misleading, says Consumer Watchdog. If the initiative passes, you could be hit with a large surcharge if your insurance has lapsed for 90 days or more in the past five years for any reason, other than overseas military service. So if you’re a soldier who has transferred to another base in the U.S., perhaps leaving your car behind temporarily, Mercury wants the right to deny you insurance when you reapply.

Mercury has also been accused of discriminating against people in 26 different occupations ranging from ironworkers to dancers, who are all ranked “unacceptable” for home insurance.

The San Jose Mercury News, in a strongly worded editorial, said Prop 17 won’t benefit drivers, adding, “The competition is on this year to see which company—Mercury Insurance or PG&E—is responsible for the worst abuse of California’s initative process. PG&E’s $28 million assault on potential competition through Proposition 16 will be tough to top, but Mercury Insurance is doing its best. It’s pumping $3.5 million into the campaign to convince voters that Proposition 17’s change in insurance regulation is in their best interests. Don’t believe it.”

Attorney General Jerry Brown has changed the language to describe the June ballot measure. The new summary for voters states that the measure would let insurance companies raise auto insurance premiums on drivers based on their coverage history. The change came after the San Francisco Chronicle reported that the bill would let insurers impose surcharges banned under Prop 103.

The measure is supported by the California Chamber of Commerce, Small Business Action Committee and leaders of the California Senior Advocates League, California Taxpayer Protection Committee, and American GI Forum of California. It is opposed by John Garamendi, former California insurance commissioner, and John Van de Kamp, former attorney general, as well as by leaders of Consumer Watchdog, Consumers Union, and VoteVets.org.

Posted by HUFFINGTONPOST.COM

A new advertisement by documentary filmmaker Robert Greenwald aims to derail Mercury Insurance Group’s efforts to change the rules that ultimately determine premiums paid by its auto-insurance customers.

Mercury, a company derided by the California Department of Insurance for its “contempt toward and/or abuse of its customers,” has spent $3.5 million to get Proposition 17 onto the state’s ballot in time for a June election.

Proposition 17 would allow auto-insurers to take into account a customer’s past coverage, rewarding many customers who have never lapsed, but penalizing others who have.

The measure’s opponents argue that Prop 17 will hurt military personnel and others who may have good reasons for deciding to drop their insurance and then resume their coverage.

Mercury CEO George Joseph told the LA Times that Prop 17 supporters want nothing more than to lower insurance rates for customers and spur competition. However, in the same interview, George acknowledged that he and his company stood to gain from it’s passage.

Greenwald’s ad, titled “Mercury Insurance Wants You To Pay More For Your Car,” mocks Mercury and fellow Prop 17 supporters for their altruistic claims.

WATCH THE VIDEO HERE.

By John Maybury, SAN JOSE MERCURY NEWS

Ever hear of a car insurance company spending millions on a political campaign to ensure they make LESS in profits? Sounds like an April Fool’s Day joke, but Mercury Insurance wants to trick you into thinking it’s for real. Proposition 17 is a deceptively written ballot measure that Mercury wants you to believe would protect consumers but would actually allow car insurance companies to stick soldiers, seniors, students, and other Californians with $1,000 surcharges. Tell every Californian you know to get the real story from our friends at the Campaign for Consumer Rights:  stopprop17.org.

SAN JOSE MERCURY NEWS EDITORIAL

The competition is on this year to see which company — Mercury Insurance or PG&E — is responsible for the worst abuse of California’s initiative process. PG&E’s $28 million assault on potential competition through Proposition 16 will be tough to top, but Mercury Insurance is doing its best. It’s pumping $3.5 million into the campaign to convince voters that Proposition 17’s change in insurance regulation is in their best interests.

Don’t believe it. This is yet another in a long line of direct attacks on Proposition 103, which California voters passed in 1988 to rein in abuses of the insurance industry. It professes to be in consumers’ interest, but it is anything but. Vote no in the June 8 election.

The basic premise of Proposition 17 is that it would allow auto insurance companies to offer a “continuous coverage” discount to new customers who switched from one insurer to another. Proposition 103 prohibits that practice.

But that’s not the provision that has riled consumer advocates. It’s a smoke screen for allowing insurance companies to substantially increase rates for drivers who, for whatever reason, allowed their insurance to lapse for more than 90 days. That could include a wide range of people, such as drivers hospitalized for a long period of time, military personnel or unemployed Californians who couldn’t keep up their premium payments.

Mercury says this would not happen because of competition.

But anyone who was around California before the passage of Proposition 103 knows the risk is not worth taking. Until that proposition passed, insurance companies often imposed high rates on drivers who had lapses in coverage, regardless of the reason. And drivers were trapped because insurance is mandatory for drivers in this state.

Mercury Insurance sells Proposition 17 as benefiting consumers, but it’s easy to see through the claim. Look at who’s opposing the proposition and who’s backing it.

Serious consumer protection groups such as Consumers Union and Consumer Watchdog are absolutely against Proposition 17. So is U.S. Rep. John Garamendi, the former insurance commissioner, who is a longtime advocate of insurance customers’ rights.

So who are the supporters? Mercury lists three so-called consumer groups, and the San Diego Union-Tribune tracked them down. Two, the Consumers Coalition of California and the California Alliance for Consumer Protection, are “basically one-person operations that have often taken pro-industry stances,” the Union-Tribune concluded. The third, Consumers First, Inc., is “being paid $5,000 a month for its work on Proposition 17. ”

Some business groups are for the proposition, but not one legitimate consumer protection organization.

Californians like to romanticize the initiative process as direct democracy by the people. Proposition 17, like PG&E’s anti-competitive Proposition 16, is the opposite: a special interest scam that would increase corporate profits and potentially harm consumers. The only way to discourage this abuse of initiatives is for voters to say an emphatic no when the worst ones come along. Don’t miss the chance in this spring’s primary.

By Dan Aiello, SACRAMENTO STATEHOUSE EXAMINER

Using April Fool’s Day to its full political advantage, the Consumer Watchdog-funded StopProp17.org (a Campaign for Consumer Rights effort) has launched a clever, tongue-in-cheek video to mock the premise and talking points of the Mercury auto insurer’s ballot initiative.

Few would argue that the Watchdog’s StopProp17.org represents out-funded opponents of the California proposition being financed primarily with the deep corporate pockets of Mercury, but what the Consumer Watchdog project might lack in financial resources, their April first launch suggests they make up at least some political ground with wit and ingenuity.

Throughout the organization’s two-minute spoof, actors portraying California voters appear momentarily stoic while a hard-selling Mercury Auto insurance representative explains why his company has spent $3.5 million dollars to qualify the initiative, “and millions more to fund the Prop 17 campaign,” while claiming it won’t profit from its passage. “It’s just because we like you,” surmises the Mercury rep. But before he can reach the end of his sentence voters burst into laughter, apparently having caught on to this Fool’s day’s political joke.

Opponents are using April First to make light of Mercury’s implausible explanation for the initiative they wrote, paid to qualify and are spending millions to pass, but the industry cash behind Prop 17 is no laughing matter.

According to the Secretary of State’s archives concerning the measure, Mercury Insurance is Proposition 17’s primary sponsor, having paid National Petition Management $2.375 million to collect the necessary signatures to qualify the measure for the state’s June ballot. Through mid-February, Mercury Insurance remained responsible for about 98% of the funding for the “Yes on 17″ campaign, having contributed about $3.5 million already, but should voters approve the measure it would afford the same opportunity for profit to all California insurance providers.

And no other state offers as much potential for profit as the insurance market of the Golden State.

California has more than 23.7 million licensed drivers who collectively pay several billion dollars in auto insurance premiums annually, making the state the industry’s largest consumer market.

Currently 80 percent of California drivers maintain continuous auto insurance consistently, which would allow them to qualify for the industry’s “persistency discount,” one of the insidious consumer markers devised to allow rate increasing by insurers.

However, about 20 percent of California’s drivers fall into the higher premium category of drivers who have had lapses in their insurance coverage, and its these consumers Mercury seeks to exploit with passage of Prop 17, the so-called “Mercury Initiative.”

Mercury, through its Yes on Prop 17 ads will try to divide and conquer California drivers by convincing the state’s electorate that drivers with lapses in coverage are identical in definition to persistently uninsured motorists, deadbeats who drive up the rates of responsible citizens.

But Prop 17’s passage would affect anyone who let their premium payment slip past its cancellation date or a host of other reasons. Prop 17 would allow insurers to require a driver remain insured from the day he or she gets a license to their last day. Those who have an unexpected job loss, experience a medical or other financial hardship, or simply find one month they must choose between food, mortgage or insurance premium, will find their financial troubles persist when insurers raise their premium (in state’s where its legal insurance premiums rise as much as 90 percent).

Veteran groups oppose Prop 17 because it doesn’t even allow U.S. service men and women to suspend their insurance while overseas fighting for their country. Should Prop 17 pass, active military and America’s veterans will be one of the groups hit hardest by rate increases.

Los Angeles Times reporter, Michael Hiltzik, has called Proposition 17 ”essentially the latest attempt by Mercury (Insurance) to eviscerate Prop 103,” which passed in 1988 providing the state an elected insurance commissioner with the authority to approve insurance rates before they reach consumers.

Insurers are specifically prohibited under Prop 103 from using the absence of a prior policy as a factor in rate-setting.

Opponents point out that should Prop 17 become law, motorists facing higher auto rates, along with military personnel, include unemployed workers needing insurance to drive to work when they find a new job, students needing insurance to commute to a summer job, people who commuted by public transit needing insurance after getting a new job that is only accessible by car, and motorists who dropped coverage when recuperating from an illness or injury that prevented them from driving.

Opponents to Proposition 17 currently include Congressman and former Insurance Commissioner John Garamendi, Consumers Union, Consumer Federation of California, Vote Vets, California Federation of Teachers, California Nurses Association, SEIU California State Council, and Democratic Party Central Committees in Los Angeles, San Francisco and San Mateo Counties. While Republican Party committees have so far not opposed the pro-business, pro-insurance industry initiative, many conservative-leaning military service members and veterans groups see the initiative as an attack on those who serve their country, making opposition to the measure bipartisan, though its mostly opposed by those representing moderate, working class and lower income drivers.

By Dave Johnson, SPEAKOUTCA.ORG

The other day I wrote that Proposition 17 — on the ballot in June — is known as the “Mercury Insurance Initiative” and that I’ll explain that later.

Well, it’s later.

The Mercury Insurance company has single-handedly spent millions of dollars to put Proposition 17 on the ballot.  Now they are about to spend millions more advertising it.  The proposition allows insurers to penalize consumers for missing one payment or having a lapse in car insurance coverage.  So if you stopped driving – couldn’t afford it, left the state, etc. – or miss a payment, your car insurance rates skyrocket.

Mercury Insurance is going to spend millions of dollars to advertise an initiative that will cost people a ton of money by claiming it saves people money?  Right – that’s why they’re spending millions on it, to save you money rather than to make themselves a bundle.  (My bet – in this current economy they will also claim that it “creates jobs.  Just a hunch.)

The Campaign for Consumer Rights has a Stop Prop 17 website, with a great video, “Mercury  Insurance Wants You To Pay More For Your Car”.  Here is is for your viewing pleasure:  http://www.stopprop17.org/2010/03/31/new-brave-new-films-take-on-mercurys-prop-17/

By Steven Harmon, CONTRA COSTA TIMES – POLITICAL BLOTTER

The Campaign for Consumer Rights is hearing through its own sources that Mercury Insurance is poised to begin its ad campaign for Prop. 17, the ballot measure that would allow drivers to carry their history of continuous coverage to new insurance companies but would result in increases in some drivers policies.

The ads will never mention to oetrue cost of Prop. 17, said Doug Heller, of the Campaign for Consumer Rights. “Mercury will spare no expenses in its campaign and hopes voters will not notice that the promises of Prop. 17’s savings are actually being made by an insurance company that is spending millions on the initiative.”

The consumer rights group, through Brave New Films, produced a pre-emptive video of its own, a spoof that ridicules the idea that Mercury would be spending millions to ensure a good deal for drivers:

http://www.stopprop17.org/2010/03/31/new-brave-new-films-take-on-mercurys-prop-17/

By Brian Leubitz, CALITICS.COM

This basic theme is really elemental, and puts the lie to Mercury Insurance’s claims that they are trying to save consumers money. Here’s the situation, stated as simply as possible.

Mercury Insurance is a big auto insurer whose goal is to make a profit. Mercury Insurance has given over $3.5 million for the initiative, most of the funding to get Prop 17 on the ballot and the campaign up to this point. Mercury says they want to be “able to offer a discount” to drivers with continuous coverage, but won’t charge more for those without that continuous coverage. Thus, they would make absolutely no money off the initiative, and would actually lose money. See #1 about their goals as a business.

Now, why exactly would somebody believe this? That they are spending $3.5 million to save their customers money?

In actuality, they want to be able to force people to keep up insurance while they are away from their cars. Soldier who is out of the country on deployment? Better keep that insurance or you will face jacked up rates when you come home. Move into the city and don’t need a car? Better keep that insurance or you will face jacked up rates in case you change to a job that requires a car commute.

Enjoy the video and pass it around. Once people see the logic they are trying to sell, they’ll swat this away.

By Brian Joseph, Sacramento Correspondent – THE ORANGE COUNTY REGISTER

So this chicken walks into a committee hearing…

No, that’s not the setup to a joke. That actually happened this morning at the State Capitol, where the folks over at Consumer Watchdog pulled a little PR stunt to raise awareness about their opposition to Proposition 17 on the June ballot.

Consumer Watchdog Founder Harvey Rosenfield appeared at a press conference with a man dressed in a chicken suit to highlight that a key figure behind Prop. 17 was too “chicken” (bah dum dum) to appear at a legislative hearing today about the ballot measure.

Click here to see the chicken and a video of him entering the committee hearing.

Silly, sure. But it worked. A giant chicken is a big step up from the typical guy in a dark suit droning on. The Sacramento press corps certainly enjoyed it. And you should have seen the faces of the state lawmakers when the chicken walked into the committee hearing.

Which is not to say that Prop. 17 is a big joke, because it’s not. The measure is sponsored and largely paid for by Mercury Insurance, the auto and home insurance company with a major office in Brea. Mercury and other initiative supporters say Prop. 17 would benefit most California drivers by allowing insurance companies to offer a “continuous coverage” discount to new customers who switch from another insurer. Opponents say its a smoke screen to charge drivers more.

You see, in 1988, California voters passed Proposition 103, which permitted insurance companies to offer discounts to their own long-term customers but prohibited them from offering such continuous coverage discounts to new customers. Rosenfield, who authored Prop. 103, said that provision was included because insurance companies were surcharging customers for not having insurance in the past. The point of Prop. 103, he said, was to ensure that California drivers weren’t penalized simply because they didn’t have insurance coverage before.

Rosenfield and his folks believe Prop. 17 is Mercury’s attempt to re-establish penalties for consumers who don’t continuous driver’s insurance –  seniors who suspend their coverage because they’re recovering in the hospital.

Rosenfield agreed to speak at today’s informational hearing about the initiative, but he was upset to hear that Mercury’s CEO, George Joseph, would not be joining him.  Joseph (who, for the record, is of no relation to this reporter) is the chicken Rosenfield was mocking.

“Proposition 17 is about a man named George Joseph. He’s the CEO of Mercury Insurance Co., one of the biggest in California. And for the last 22 years he’s been fighting to strip California law of consumer protections that the voters put into effect when they passed Prop. 103 back in 1988,” Rosenfield said.

“Now George Joseph has poured $3.5 million of Mercury Insurance Co. money into Prop. 17, which would allow insurance companies to raise people’s premiums if you’ve ever had a lapse in coverage or you’ve didn’t have prior insurance, say because you’re out of state going to college or because you’re a senior citizen who is hospitalized.”

Supporters of Prop. 17 say Rosenfield and other opponents have it all wrong. They say the initiative doesn’t create any new penalties for drivers, it only would allow companies to offer additional discounts to drivers who have had insurance for a long time. They say Mercury is spending big money on the initiative because it could help create more competition in the marketplace. It also could help the company get more market share.

“The more competition that we can infuse into the marketplace, the more choice, the lower rates, the more the consumer benefits,” said Michael D’Arelli, executive director of the Alliance of Insurance Agents & Brokers, who the Yes on Prop. 17 people provided as a counterpoint to Rosenfield and his chicken. “This measure saves probably 80 to 82 percent of California drivers money.”

To that Rosenfield and others in the Stop Prop. 17 camp simply respond: “Since when would an insurance company spend millions of dollars to put an insurance initiative on the ballot that’s going to save people money?”

Meanwhile, another high-ranking Mercury official, however, was scheduled to testify, which made the whole chicken thing particularly galling to them.

All kidding aside, this is a bitter fight between old enemies, Consumer Watchdog and Mercury Insurance — but it might not have to be. In theory, the Legislature could pass a bill, contingent on the passage of Prop. 17, that would explicitly outlaw the things Consumer Watchdog is afraid will happen. That would eliminate Consumer Watchdog’s fears, presuming that’s what they’re really afraid of, and it would keep the benefits Mercury and its people say they want, presuming that’s what they’re really after.

It could be an easy fix, but that would require both sides to give up their little game… of chicken. (Couldn’t resist. Sorry.)

Also, a special shout out to Bob Moffitt of Sacramento’s NewsTalk 1530 KFBK radio who shot the video of the chicken.

By Bob Moffitt, KFBK AM 1530 SACRAMENTO, CA

(Click here to listen/view news segment.)

When the proponent of an insurance proposition didn’t appear before a committee, a man in a chicken suit took his place.

Harvey Rosenfield is the founder of Consumer Watchdog and the lead opponent of Proposition 17.  Rosenfield says if voters pass it, insurance companies will be able to add a surcharge to policies of new or former customers who have no existing policy. Rosenfield has called for Mercury Insurance founder George Joseph to appear before the committee.  Joseph declined, so Rosenfield brought a man in a chicken costume in his place.

Mike D’Arelli of the Alliance of Insurance agents and brokers did appear. He says surcharges will not go up, but that Prop 17 will allow customers to switch companies and keep those continuous coverage discounts.

Mercury Insurance lost a lawsuit that tried to ban language from the ballot that says rates for previously uninsured drivers will go up.