California insurance commissioner wants Mercury to cut homeowner rates
SACRAMENTO -- State regulators have ordered Mercury Casualty Co. to cut its homeowner’s insurance rates by 8.2%, but the Los Angeles-based insurer is contesting the ruling.
“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,” said California Insurance Commissioner Dave Jones in a statement released Tuesday.
After holding a public hearing, Jones approved a decision by a state administrative law judge that rejected a 7.3% increase proposed by Mercury. Jones used his powers to declare Mercury’s request for a rate hike as “excessive.”
Mercury did not respond to requests for comment on the commissioner’s announcement. However, in legal filings, the company argued that its “homeowners premiums are among the lowest in the state.” The commissioner, it contended, relied on outdated data and “incorrect legal and factual conclusions.”
A 1988 voter-approved law, Proposition 103, requires the commissioner’s approval or rejection of all property and casualty insurance rates.
Mercury is suing the commissioner in Sacramento County Superior Court to stop him from ordering rate reductions totaling $16.5 million for 270,000 California homeowner’s policyholders.
“I have directed the Department of Insurance to vigorously defend against Mercury’s effort to deprive homeowners of this rate decrease,” Jones said.
Consumer Watchdog, an advocacy group that opposed Mercury’s original request for an 8.8% rate hike said that the insurance company had “ample opportunity to justify its requested rate hike” but failed to persuade the judge and commissioner.
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