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Prop. 17 Promises Insurance Discounts

May 21st, 2010

Opponents Doubt Many Drivers Would Benefit

By Timm Herdt, THE VENTURA COUNTY STAR

Proposition 17, a measure on the June 8 ballot funded primarily by $13.8 million in contributions from Mercury General Insurance, promises to create a new category of discounts for California motorists.

There is, according to a Department of Insurance analysis, a catch.

“A basic principle of insurance rate-making,” the analysis says, is that “every discount requires a corresponding surcharge so that every factor influencing a rate will balance evenly over an insurer’s book of business.”

In other words, there is no free lunch for everyone — and the advocacy group Consumer Watchdog challenges the notion that Proposition 17 would even result in a discounted lunch for anyone.

Supporters, including the Alliance of Insurance Agents and Brokers, say most motorists would benefit from the change because it would promote increased competition.

What Proposition 17 proposes is to add another factor upon which auto insurance rates can be based under the basic rate-making formula established by 1988’s voter-approved Proposition 103.

That initiative said rates can be based only on miles driven, the number of years a driver has been licensed and the safety record of the driver. Subsequently, state insurance regulators have added 16 other optional factors, including what is called a “persistency” discount. That means an insurance company can offer discounts as loyalty rewards to long-time customers.

Proposition 17 would change the law to allow competitors to offer the same kind of discount to drivers who switch insurance companies, as long as they have continuously purchased auto insurance over the previous five years without an interruption of more than 90 days.

Those who had a break in coverage for any period of time as a result of failure to pay a premium would not be eligible.

Members of the military who have allowed their coverage to lapse while serving overseas would not be penalized for having an interruption. That exemption would not apply to those who dropped coverage while stationed at a base inside the United States.

Proponents say the change could result in about 80 percent of California drivers having a chance to claim a discount not now available to them if they switch carriers.

“Passage of Proposition 17 means more competition in the auto insurance marketplace, more choices for consumers and lower rates,” said Michael D’Arelli, executive director of the agents’ and brokers’ group.

Doug Heller, spokesman for Consumer Watchdog, argues that there are many legitimate reasons some people may have chosen to go without insurance for a period of time — a prolonged recovery from surgery, a loss of employment that resulted in having to sell a vehicle, a period of time living on a college campus or in an area well-served by public transit.

Consumer Watchdog and other critics also argue that Mercury Insurance is simply not credible when it underwrites an initiative that promises to lower rates.

Mercury’s $13.8 million in contributions represent more than 99 percent of the money the Proposition 17 campaign has raised. No other insurance company in the state has financially supported or endorsed the initiative.

Last month, a Department of Insurance review of rates charged by Mercury resulted in allegations the company had overcharged consumers and found 35 categories of alleged violations. They included charging higher rates based on traffic violations that occurred well beyond the three-year window in which violations can be lawfully considered, penalizing customers for having been involved in accidents in which they were not at fault and denying coverage to people who worked in certain occupations, such as bartender or cocktail waitress.

“The sponsor of the initiative was just sued by the Department of Insurance for failing to provide the discounts it was already supposed to be giving customers,” Heller said. “They’re not in the business of giving customers money back.”

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California’s Proposition 17 is a Wolf in Sheep’s Clothing

May 21st, 2010

By Byron Williams, SAN JOSE MERCURY NEWS

Regardless of the positive spin offered by its proponent’s commercials, Proposition 17 in many ways represents what’s wrong with the initiative process. It is nothing more than the wolf of greed masquerading in the sheep’s clothing of consumer choice.

Backers of Prop. 17 argue that, under current law, drivers who have maintained auto insurance with the same insurance company are eligible for a continuous coverage discount. However, a flaw in the law prohibits drivers from taking this continuous coverage discount with them if they switch insurers.

To correct this problem, Prop. 17 in theory would allow drivers to keep their continuous coverage discount even if they change insurers. As result, there would be increased competition, which would translate to lower rates for California consumers.

If this were all the information I had to go on, I along with countless others would probably support Prop. 17 on the June 8 ballot. But all legislation, whether passed by the Legislature or by the electorate via a ballot measure, comes with unintended consequences.

This prompts the question: What are the unintended consequences, if Prop. 17 passes? I say unintended consequences from the perspective of the consumer and not the supporters of Prop. 17.

This initiative is portrayed as a simple change in the law that would allow insurers to offer a continuous coverage discount on policies to new customers who switch insurance companies. Consumers would be eligible for the discounts if their coverage had not lapsed for more than 90 days in the past five years. If the lapse occurred because of military service abroad, the discount would still be available.

But insurers would be allowed to increase the cost of insurance to drivers who dropped their car insurance for 91 days or more in the past half decade. Surcharges of several hundred dollars or more would be allowed even for motorists with good driving records.

Here’s a partial list of who would be eligible for the surcharge under Prop. 17:

  • Soldiers serving on base in the United States could be penalized when returning to civilian life.
  • Someone who is out of work and cannot afford insurance or even a car for a time would be surcharged for getting back on his or hers feet.
  • A family whose coverage was canceled after missing just one auto insurance payment would be penalized even if they tried to restart coverage immediately after they were canceled.
  • Students who are away at college and don’t need a car would be penalized when they graduate and need a car to enter the workforce.
  • Anyone buying auto insurance for the first time would have to pay a surcharge.

If Prop. 17 passes, there will be more uninsured drivers, which raises premiums for all drivers.

Perhaps you are asking yourself: “Who would come up with such a ridiculous measure?” It is none other than the Mercury Insurance Co. that has magnanimously spent in excess of $10 million to qualify and support Prop. 17.

Moreover, Prop. 17 is essentially the return of SB841, which passed the Legislature and was signed by then-Gov. Gray Davis in 2003, but was overturned by the courts.

The court viewed SB841 as an infringement on Prop. 103, which was passed by California voters in 1988. Prop. 103 regulated how insurance companies market and administer their policies.

Perhaps there is no correlation between the ratings agency Standard & Poor’s downgrading Mercury’s financial strength and their underwriting a ballot measure that could net them an estimated $32 million in fee increases. I realize it is very cynical of me to not see Mercury’s support of Prop. 17 as anything other than a desperate attempt to improve its bottom line in an extremely competitive insurance market.

Though California’s initiative process gives voters the right to enact legislation, it is rare when that process is spurred by grass roots efforts. There would not be a Prop. 17 on the ballot if Mercury insurance did not have $10 million to spend or if the courts did not throw out SB814 out after Mercury had successfully gotten it passed through the Legislature and signed by Davis.

Mercury has chosen the people as the last and best opportunity to support its skulduggery.

As Mercury claims feverishly through its advertising that Prop. 17 is needed to make California a competitive market that actually lower rates, I keeping asking myself: “When was the last time an insurance company spent more than $10 million on a ballot measure because it was fighting on behalf of consumers?”

Reach Byron Williams at 510-208-6417 or e-mail him at byron@byronspeaks.com .

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Companies Hijack Initiative Process

May 20th, 2010

Editorial, THE MONTEREY COUNTY HERALD (California)

Next year marks the 100th anniversary of California’s landmark decision to give voters a direct voice in governance through the initiative process. The public, as is its nature, has generally used it wisely, with an assist from the courts, which have done a rather good job of cleaning up the occasional mistakes.

But, as demonstrated by two measures on the June 8 ballot, the process has been hijacked to a distressing degree by the very forces it was designed to protect against, special corporate interests.

Progressive politicians and California voters created the initiative process in 1911 largely as part of an effort to wrestle political power away from the Southern Pacific Railroad. The railroad company, known not so affectionately as the Octopus, held unmatched sway over electoral politics, the courts and the newspapers of the day.

It worked, and ballot measures have proved to be fairly effective at forcing the political parties and the political pros in Sacramento to pay some attention to the folks back home. They are, however, being used more and more to serve whoever has the money to pay for signature gathering and considerable advertising. The initiative process has become a dramatic example of the law of unintended consequences. Look no further than Proposition 16 and Proposition 17 on the June ballot.

Pacific Gas & Electric Co. is the sole sponsor of Proposition 16, which would require a two-thirds supermajority before communities could buy out their utility providers or buy power from independent operators. Existing publicly owned utilities also would need an almost unobtainable two-thirds vote before expanding into neighboring territory. Beyond the state Chamber of Commerce, almost no significant political organizations support the measure.

Who is opposed to Proposition 16? A wide-ranging group that includes the California Association of Realtors, California Manufacturers & Technology Association, League of Women Voters, Sierra Club, AARP, League of California Cities, the SEIU and the California Farm Bureau, for starters.

Like Proposition 16, Proposition 17 is being falsely promoted as a consumer protection measure. Who it really protects is its sponsor, Mercury Insurance, California’s third largest auto insurer.

On the surface, it sounds good. Proposition 17 would enable Mercury to offer discounts to customers who can demonstrate that they have had no lapses in their insurance coverage. But what it really does is create loopholes in a legitimate 1998 ballot measure that put limits on insurance companies’ ability to raise rates for most drivers.

Proposition 17 would penalize even the safest drivers for having let their insurance lapse in the past but it also would discourage uninsured motorists from obtaining insurance and would penalize good drivers whose insurance had lapsed because they weren’t driving. Among those hurt would be college students who left their cars at home, military personnel sent on temporary assignments or people who had experienced long hospitalizations.

The advertising campaign will try to convince voters Mercury Insurance has selflessly spent $10 million so far to protect insurance customers.

Logic so clearly weighs against these propositions that they hardly seem worth worrying about. But the potential is great for well-financed ad campaigns that will mislead and confuse the voters into voting against their own interests. If either of these propositions is approved, it will demonstrate that we need to find a way to restore the original intent of the initiative process.

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Should Insurance Discount Be Transferrable? No: It Can Mean Higher Rates if a Policy Lapses

May 19th, 2010

By Harvey Rosenfield, THE DESERT SUN (Palm Springs, CA)

Op-Ed Special to The Desert Sun

Last month, the California Department of Insurance cracked down on an insurance company that has been overcharging motorists for 15 years.  That company, Los Angeles-based Mercury Insurance, also wrote and is bankrolling Proposition 17 on the June ballot. Mercury wants you to believe that its measure will save everyone money.

When was the last time an insurance company spent $5 million on a ballot initiative to lower your rates?

In fact, Mercury’s Proposition 17 gives insurance companies the power to raise rates on millions of Californians. Which is why you should vote no.

This deceptively written initiative allows insurance companies to surcharge people who have not been previously insured  -  even if they are perfect drivers who weren’t insured because, for a time, they weren’t driving. Proposition 17 also penalizes anyone who had to drop coverage for more than 90 days over the last five years, or missed just one insurance payment.

These surcharges are illegal in California today: the voters banned them in 1988. But in states that have laws similar to Proposition 17, the surcharges can raise the price of car insurance by 200% or more – adding thousands of dollars to the annual cost of insurance.

We must stop Prop 17 because if it passes, insurance companies will be less accountable and allowed to raise our rates.  Especially hard hit will be seniors who stopped driving for a period of time. Ditto for college students who don’t need a car until the summer.  Or people who, in this horrible economy, simply can’t afford to pay for insurance – even if they are good drivers. Proposition 17 would even punish Californians who serve in the military stateside and must interrupt their coverage while in boot camp.

Of course, when millions of good drivers face massive surcharges when they try to buy car insurance, California will see more drivers go uninsured, because they no longer can afford to buy coverage.  When fewer drivers buy insurance, we all end up paying more.

Californians are rightly suspicious when big corporations try to manipulate the initiative process for their own self-interest; Proposition 17 is one of two special interest initiatives funded by big corporations on the June ballot. (The other is PG&E’s Proposition 16.)

Mercury Insurance has also certainly proved that it cannot be trusted. Arguments about Prop. 17 made by the company and its paid spokespeople have been repeatedly reviewed and rejected as false by the courts and state regulators.

And just recently, the insurance commissioner brought an administrative lawsuit against Mercury alleging that it engaged in more than 50 practices that are illegal under California law, victimizing thousands of Californians. Investigators discovered that Mercury failed to give customers the discounts they were entitled to and overcharged people just because they are self-employed, work out of their homes, were waitresses, or had health problems. The company even broke its own previous pledges to regulators that it would stop violating California laws. The company faces tens of millions of dollars in fines.

Mercury Insurance’s sponsorship of Proposition 17 is like Bernie Madoff backing a ballot proposition claiming to protect investors.

The last thing California families can afford right now is an initiative that makes insurance companies less accountable for their actions, leads to more uninsured motorists and skyrocketing auto insurance premiums. That’s why Consumers Union, the non-profit publisher of Consumer Reports magazine, veterans groups and seniors all agree: Vote no on Proposition 17.
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Harvey Rosenfield is the founder of Consumer Watchdog and author of 1988 insurance reform Proposition 103. Contact him via the Web site stopprop17.org

PROPOSITION 17, Auto Insurance

Allows auto insurance companies to base their prices in part on a driver’s history of insurance coverage.

Fiscal Impact: Probably no significant fiscal effect on state insurance premium tax revenues.

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Mercury Insurance Drops $10 Million on Prop. 17 Shell Game

May 19th, 2010

By Scott Martelle, Protect Consumer Justice -
CALIFORNIA PROGRESS REPORT

One of the oddities of California politics is the way different factions use the initiative process to try to sneak into law programs and policies that, given full attention and airing, would die an inglorious death. Add Proposition 17, the bizarrely named “Allows Auto Insurance Companies to Base Their Prices in Part on a Driver’s History of Insurance Coverage,” to the list of propositions-as-shell games.

Prop. 17 has, in effect, one serious backer: Mercury Insurance, which has kicked in $10 million to get it on the ballot and finance the campaign to get it passed. No surprise why: The measure would let Mercury and other insurance companies charge customers a premium if there’s a lapse in coverage. While sounding stultifyingly boring, that means consumers who go uninsured for any amount of time will get whalloped.

In essence, Mercury is trying to buy a law that would let it do an end run around Proposition 103, passed in 1988 to try to corral excessive insurance rates.

Incidentally, Mercury isn’t exactly a poster child for Good Corporate Citizenship. The San Francisco Chronicle has been reporting on some of its shenanigans, citing a state report that indicated Mercury may have violated Prop. 103 (if you can’t beat it, change it?):

A high-profile California insurance company that is backing a controversial insurance measure on the June ballot has engaged in practices that may be illegal, including deceptive pricing and discrimination against consumers such as active members of the military and drivers of emergency vehicles, according to a state report obtained by The Chronicle.

The report, obtained through the state Public Records Act, alleges that Mercury Insurance Group may have violated Proposition 103, the landmark consumer protection law approved by voters in 1988.

So far, the only significant newspaper editorial board to think Prop. 17 is a good idea is the Orange County Register, which also thinks government should be limited to a Hobbesian minimum. So we’ll discount that voice. The rest are unanimous. As the San Jose Mercury News put it:

“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.”

Incidentally, the $10.6 million raised from all sources for the measure dwarfs the $535,000 opponents have been able to muster. So if the measure passes, it will stand as sterling proof that the initiative process is a mechanism for corporations to buy the laws they want.

And it’s not the only corporate-serving initiative in the June ballot. Pacific Gas&Electric is pushing Proposition 16 — fittingly enough right next to Prop. 17 on the ballot — to require a two-thirds vote before a municipality can create a local utility. PG&E has spent $35 million to try to preserve its monopoly.

And people wonder why voters are so cynical.
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Scott Martelle is a veteran journalist, including 12 years at the Los Angeles Times. He currently writes for Protect Consumer Justice, a project of Civil Justice Research&Education Project. The site’s goal is to honestly report on consumer, legal and political issues important to the American civil justice system.

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Mercury Insurance Company Misleads Its Policyholders in Prop. 17 Letter Obtained by Consumer Watchdog

May 5th, 2010

NEWS RELEASE

Contact: Naomi Seligman, 310-392-0522, ext. 318; or Harvey Rosenfield, ext. 303

3rd Largest Auto Insurer Doesn’t Plan On Telling Customers They Could Face Price Hikes

Santa Monica, CA –A letter Mercury Insurance Company apparently intends to send to its policyholders this week urging them to support Proposition 17 fails to disclose that its customers could be forced to pay enormous surcharges if the initiative passes. It also contains other false and misleading statements, consumer advocates said today.

Mercury’s letter, a copy of which was obtained by Consumer Watchdog, comes just a day after the company began a long-expected onslaught of TV ads that immediately drew criticism from experts and consumer advocates for misleading voters. The letter can be downloaded at http://www.consumerwatchdog.org/resources/MercuryLetter2Policyholders.pdf

“This is yet another reason why Californians cannot trust Mercury Insurance or Proposition 17,” said insurance reformer Harvey Rosenfield. “To protect yourself and your family from the impact of this deceitful and dangerous initiative, you must vote no on 17.”

Mercury has consistently misled the public concerning Proposition 17. The company has denied that Proposition 17 will allow it and other insurance companies to raise rates and sued both the Attorney General and consumer advocates to try to prevent that information from appearing in the voter guide. Mercury lost that battle, and the AG’s analysis states that Prop 17 “will allow insurance companies to increase cost of insurance to drivers who do not have a history of continuous insurance coverage.”

The Mercury letter obtained by Consumer Watchdog makes the following false and misleading statements:

Mercury Statement: “From 1995-2005, a continuous coverage discount was available to all California drivers who maintained continuous insurance coverage with any insurer. During this time Mercury provided up to a 25% discount to all customers who maintained continuous insurance coverage.”
Fact: Setting premiums based on whether a motorist has been previously insured has been illegal since voters passed a ban on the practice in 1988. However, beginning in the 1990s, Mercury intentionally violated that law, surcharging people 40% or more, until it was forced to stop by the courts and the insurance commissioner. Prop 17 would legalize these surcharges.

Mercury Statement: “Proposition 17 ends the penalty for changing insurers.”
Fact: There is no penalty for changing insurers.

Mercury Statement: Current law “punishes responsible drivers by prohibiting them was taking their continuous coverage discount with them if they switch insurance companies…They should be able to take their continuous coverage discount” when they “change insurers.”
Fact: There is a discount for customers who remain with the same company for a period of years, but Prop 17 does not address that discount. Moreover, contrary to Mercury’s statement, if 17 passes, and you switch companies, the new company will not honor your loyalty discount with your previous company.

Mercury Statement: “This is no different than…the law allowing cell phone customers to keep their phone numbers when changing telephone companies.”
Fact: Cell phone companies cannot penalize you if you never owned a cell phone before, or stopped using one. Prop 17 allows insurance companies to penalize you if you never owned a car before, or never drove – even if you are a good driver.

Mercury Statement: “Proposition 17 encourages drivers to stay insured – meaning fewer uninsured motorists.”
Fact: Prop 17 will legalize surcharges that will lead to more uninsured motorists on the road, according to the California Department of Insurance.

Mercury Statement: Prop 17 “protects our military…if they cancel insurance while overseas.”
Fact: Mercury fails to reveal that under Proposition 17, military serving stateside get surcharged if their coverage lapses for more than ninety days.

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When Auto Insurance Customers Are The Victims

May 4th, 2010

By Shane, THE AUTO INSURANCE.COM

We’ve written quite a bit about how some otherwise honest auto insurance customers attempt to defraud their insurers – but it sometimes it works the other way as well. For example, earlier this month, we covered a case in Louisiana in which an insurance agent was pocketing customer’s premiums without writing up the policies for which they had paid (see “Insurance Fraud Continues as Recession Drags On”).

Sometimes however, it’s more insidious. Consider the case of Mercury Insurance, one of California’s largest underwriters of auto insurance policies.

Are Corporations “People”?

We discussed California’s controversial Proposition 17 a few weeks ago (”When Does a Lapse in Coverage Justify Higher Rates?”), which would allow an auto insurer to offer a “persistency discount” to a customer who switches from another auto insurer – thus forcing insurance companies to compete harder for clients. The major argument against the proposed law is that it would possibly allow auto insurers to penalize people who drop their auto coverage for a time because they don’t actually own a vehicle.

Sadly, proponents and opponents of the law have filed suits and counter-suits in civil court and have muddied the issues so badly that the average voter really doesn’t understand what’s at stake.

However, some interesting facts have come out about the legislation’s corporate sponsor, Mercury Insurance.

The Regulator’s Report

According to the California Department of Insurance (CDI), Mercury has been overcharging customers since the mid-1990s – and doing this in a variety of ways, including failure to offer discounts mandated by the state, imposing illegal “fees” and surcharges, and even outright discrimination on the basis of medical issues and even occupation.

Interestingly, Mercury has been spending millions on advertising aimed at convincing California voters to approve Proposition 17 – a law the company had a hand in writing.

The CDI report reveals that Mercury had denied coverage to drivers who are legally handicapped and is continuing to charge certain customers who are required to carry proof of coverage a surcharge equal to 15% above and beyond their premiums. The company has also been charging their customers for accidents in which they were not the responsible party and prematurely canceled policies for low income people who qualified for California’s Low Cost Automobile Insurance Plan.

Not surprisingly, JD Power, which ranks insurers in terms of customer service and consumer satisfaction, places Mercury near the bottom.

Credibility Issues

On the surface, regardless of who authored the proposed legislation, Proposition 17 would seem to be a good deal for consumers. However, controversy over “Corporate Personhood” aside (as when a corporation – such as an auto insurer – writes legislation, which is actually the job of natural, human lawmakers), at a time when people are increasingly outraged by the way business has been inserting itself into the political process, this report is very likely to destroy any credibility Mercury’s ad campaigns might have had. This makes it unlikely that Proposition 17 will pass in June.

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Prop 17: It’s a Rate Hike in Disguise

May 2nd, 2010

By Harvey Rosenfield, Op-Ed – THE VACAVILLE REPORTER

Days ago, the California Department of Insurance cracked down on an insurance company that has been overcharging motorists for 15 years. That company, Los Angeles-based Mercury Insurance, also wrote and is bankrolling Proposition 17 on the June ballot. Mercury wants you to believe that its measure will save everyone money.

When was the last time an insurance company spent $5 million on a ballot initiative to lower your rates?

In fact, Mercury’s Proposition 17 gives insurance companies the power to raise rates on millions of Californians. Which is why you should vote no.

This deceptively written initiative allows insurance companies to surcharge people who have not been previously insured — even if they are perfect drivers who weren’t insured because, for a time, they weren’t driving. Proposition 17 also penalizes anyone who had to drop coverage for more than 90 days during the last five years, or missed just one insurance payment.

These surcharges are illegal in California today: the voters banned them in 1988. But in states that have laws similar to Proposition 17, the surcharges can raise the price of car insurance by 200 percent or more, adding thousands of dollars to the annual cost of insurance.

We must stop Proposition 17 because, if it passes, insurance companies will be less accountable and allowed to raise our rates. Especially hard hit will be seniors who stopped driving for a period of time. Ditto for college students who don’t need a car until the summer. Or people who, in this horrible economy, simply can’t afford to pay for insurance, even if they are good drivers. Proposition 17 would even punish Californians who serve in the military stateside and must interrupt their coverage while in boot camp.

Of course, when millions of good drivers face massive surcharges when they try to buy car insurance, California will see more uninsured drivers, because they no longer can afford to buy coverage. When fewer drivers buy insurance, we all end up paying more.

Californians are rightly suspicious when big corporations try to manipulate the initiative process for their own self-interest; Proposition 17 is one of two special interest initiatives funded by big corporations on the June ballot. (The other is PG&E’s Proposition 16.)

Mercury Insurance has certainly proved that it cannot be trusted. Arguments about Proposition 17 made by the company and its paid spokespeople have been repeatedly reviewed and rejected as false by the courts and state regulators.

And just recently, the Insurance Commissioner brought an administrative lawsuit against Mercury alleging that it engaged in more than 50 practices that are illegal under California law, victimizing thousands of Californians. Investigators discovered that Mercury failed to give customers the discounts they were entitled to and overcharged people just because they were self-employed, worked out of their homes, were employed as waitresses, or had health problems. The company even broke its own previous pledges to regulators that it would stop violating California laws. The company faces tens of millions of dollars in fines.

Mercury Insurance’s sponsorship of Proposition 17 is like Bernie Madoff backing a ballot proposition claiming to protect investors.

The last thing California families can afford right now is an initiative that makes insurance companies less accountable for their actions, leads to more uninsured motorists and skyrocketing auto insurance premiums. That’s why Consumers Union, the non-profit publisher of Consumer Reports magazine, veterans groups and seniors all agree: Vote no on Proposition 17.

The author is founder of Consumer Watchdog and wrote the 1988 insurance reform, Proposition 103. Visit www.stopprop17.org.

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Mercury Pours Another $2 Million into Prop 17 Campaign as Newspapers Throughout State Come Out Against Prop 17

April 28th, 2010

NEWS RELEASE

CONTACT: Doug Heller, 310-392-0522, ext. 309; or Naomi Seligman, 310-392-0522, ext. 318

Santa Monica, CA — Struggling with months of negative publicity because it has been exposed for discriminating and illegal overcharging of its customers, Mercury Insurance this week has poured another $2 million into its campaign for Prop 17 on the June ballot.

Mercury is throwing millions more into its proposition to contend with high-profile editorial boards across the state that have come out squarely against Prop 17 including most recently, the Los Angeles Times, the Sacramento Bee, the San Francisco Chronicle and Long Beach Press-Telegram. More editorials can be read here: http://www.stopprop17.org/editorials/

Mercury, which has been airing radio ads for months, is expected to launch its first wave of television commercials shortly. Prop 17 would allow insurance companies to increase premiums for California drivers based on their history of purchasing auto insurance.

“Mercury wants to hide behind millions and millions of dollars in deceptive advertising to pass its self-serving initiative,” said Doug Heller with Stop Prop 17.  “Voters can be sure of one thing: insurance companies don’t spend millions on a ballot measure to save Californians money.”

To date, Mercury has spent $7.25 million on its Prop 17 campaign.

Regulators Find Wide Ranging Violations by Mercury

Earlier this month, the California Department of Insurance announced that it recently finalized a major investigation of Mercury and turned up 54 different violations, including illegal surcharging of consumers, failing to give customers proper discounts and failing to correct errors from prior investigations despite company promises to do so. The Department has filed a “Notice of Noncompliance” lawsuit against Mercury and could fine the company millions of dollars and force Mercury to make refunds to thousands of customers.   More information about the Department investigation is available at http://bit.ly/9GMtFl

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

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Marketing to Distrust

April 14th, 2010

By Anne Landman, PR Watch.org

Enron, Goldman Sachs, Halliburton, Monsanto, Blackwater, Bank of America, Citigroup, Cigna, Aetna, Enron, Arthur Andersen, Mercury Insurance, Philip Morris… These are just a few corporate names that engender feelings of distrust, anger and betrayal. They represent scandals, greed, blatant disregard for public welfare, lavish spending of taxpayer money and other negatives, and serve as reminders about how corporate wrongdoing has brought shame on our country and harmed millions.

But as the public grows more distrustful of big corporations, corporations are fighting back by evolving more clever and sophisticated forms of public relations. Their goal? To manipulate public attitudes and assure that widespread negative feelings don’t block their ability to do business. Increasingly, corporations are engaging in variations on the theme of “corporate social responsibility,” to try and persuade us that they can be trusted again.

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