All posts by DougHeller

How Many Insurance Executives Does It Take to Own $12 Million Worth of Homes?

If, out of some prurient curiosity, you ever wondered how an insurance executive lives, check out the house Mercury Insurance CEO Gabe Tirador bought soon after taking over the reins in 2007 (and about a year before laying off 363 employees).  Of course, CEO's houses are bubkis compared with the Chairmen.  That's where the real square footage is.  Mercury's founding Chairman lives in a Los Angeles palace, also pictured at our new StopTheSurcharge.org website, which pulls back the veil on these executives and their effort to add a new surcharge to California car insurance premiums for anyone who didn't have auto insurance at some point in the past five years.  Even if they didn't have a car!

 The site will keep updated tabs on Mercury's attempt to raise car insurance rates as well as the goings-on of these executives who are, not surprisingly, completely out of touch with what it means to be dealing with the economic realities of most Californians.  There is info on how this initiative is scrooging soliders as well as info on the front groups Mercury is deploying to pitch their scam.

And you can be sure there is more to come, since we're dealing with an insurance company described by state regulators this way:

Mercury's lengthy history of serious misconduct, and its attitude – contempt towards and/or abuse of its customers, the Commissioner, its competition, and the Superior Court – are all relevant to determining the penalty needed to best ensure the protection of the public from future violations and wrongdoing…

Among Department [of Insurance] staff, consumer attorneys, and consumer victims of its bad faith, Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference.*

*The statement came in a brief submitted by the Department of Insurance in February 2009 in response to a motion by Mercury to exclude evidence of the company's past conduct. See key pages from that brief here. See, particularly, page 4.

 

Mercury Insurance Submits Sigs to Raise Car Insurance Rates

Mercury Insurance is in the process of submitting its signatures to place a deceptive measure on the June or November ballot that would raise insurance premiums on California drivers. This is another one of those initiatives funded entirely by a self-serving company (all $4.5 million to the campaign come from Mercury) that will use its endless amount of money to try and trick voters into paying more for car insurance.

The measure would allow Mercury and every other insurer to penalize Californians who want car insurance but have had a lapse in coverage anytime in the past five years. The penalty, which would amount to hundreds of dollars, would be imposed whether or not the person was driving when they didn't have insurance.  (Can you even buy car insurance if you don't have a car?)

In the wake of this nasty recession, there are too many people who will face a major penalty when they try to get back on their feet and  into their car (and the insurance market), if this passes.  Some of the types of folks to face Mercury's car insurance surcharge are:

*A senior citizen who stops driving for several months after surgery would be penalized when she tries to restart insurance coverage.

*A soldier serving on base in the United States would be penalized when he returns to civilian life in California and needs auto insurance again.

*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.

*Anyone who gives up driving for public transportation or to bike to work would be penalized when they need a car and insurance again.

As Iraq War veteran Jon Soltz of VoteVets.org  said: “Penalizing troops with higher rates while in service to their country is beyond the pale. I don't understand why an insurance company should be allowed to charge service members higher auto insurance premiums just because they may have decided that they didn't need a car while living on base. There’s something wrong with an initiative on the ballot that says that it’s ok to surcharge our troops and I hope Californians feel the same way.”

When millions of Californians are penalized when they try to buy auto insurance, the number of uninsured motorists on California roads will go up and everyone’s premiums will increase as a result.

In pressing for this initiative, Mercury is launching a deceptive campaign meant to hide the proposal's inherent attack on families struggling in these tough times. When the California Court of Appeal invalidated a virtually identical 2003 Mercury-sponsored law, the Court, citing the Department of Insurance's senior actuary, ruled that Mercury's proposal “would result in a surcharge equal to a 40 percent increase in premium for…policyholders who do not qualify for the 'continuous insurance' discount.”

Mercury Insurance is the Sole Funder of Initiative but is Hiding Behind a Front Group.

The proposed initiative is solely funded by Mercury Insurance, California's third largest auto insurer, which has provided $4.5 million to the campaign to date. Mercury has set up a front group, Californians for Fair Auto Insurance Rates or CAL-FAIR, in an effort to ensure that the news media have no access to Mercury's CEO Gabe Tirador and its billionaire Chairman George Joseph. (Those two guys: not so worried about the economy or their car insurance premium!) Mercury's executives cannot honestly explain their initiative without acknowledging that millions of Californians will pay higher premiums if it passes, so they have set up a firewall to deflect any questions towards their public relations consultants.

Mercury execs are also afraid of being asked about their company's long history of lying to voters, regulators and the courts.  In fact, The CA Department of Insurance described Mercury  as an abusive anti-consumer company, in an official filing made in a Department action against the company earlier this year. The Department wrote:

Mercury's lengthy history of serious misconduct, and its attitude – contempt towards and/or abuse of its customers, the Commissioner, its competition, and the Superior Court – are all relevant to determining the penalty needed to best ensure the protection of the public from future violations and wrongdoing… Among Department [of Insurance] staff, consumer attorneys, and consumer victims of its bad faith, Mercury has a deserved reputation for abusing its customers and intentionally violating the law with arrogance and indifference.

A copy of the Department filing can be found here. (See page four, in particular.)

The Campaign for Consumer Rights, a nonpartisan, nonprofit organization is working with consumer groups, seniors, unions and soldiers to oppose Mercury's deceptive initiative. Campaign for Consumer Rights is the campaign affiliate of the nonpartisan, nonprofit Consumer Watchdog.

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25 Cal Republican Lawmakers Urge Supreme Court to Help Safeco Insurance

(Rather crazy all in all. You have to wonder what the Republicans are getting for this… – promoted by Brian Leubitz)

Cross-posted at ConsumerWatchdog.org.

In a stunning show of fealty to insurance giant Safeco, 14 Republican state Senators and 11 Assemblymembers have asked the California Supreme Court to overturn an appellate ruling that Safeco Insurance has to disclose the names of policyholders it may have cheated. 

SafeCo-Reps.jpgConsidering that state lawmakers are supposed to be spending their time grappling with the disastrous state budget, it must be very important to these lawmakers to protect Safeco from accountability for overcharging Californians, including, no doubt, folks in their district.  Who do they think are their constituents?… O’ Safeco, how can we serve you?

The Senators who signed the letter are, pictured from left to right, Sen. Cogdil, Sen. Aanasted, Sen. Benoit, Sen. Ashburn, Sen. Cox and Sen. Hollingsworth, as well as Senators Denham, Dutton, Harman, Huff, Runner, Strickland, Walters and Wyland (Maldonado is the only Republican Senator not to sign). Also signing were Assemblymembers Smyth, Tran, Strickland, Silva, Fletcher, Berryhill, Garrick, Gilmore, Fuller, Anderson and Logue.

Here’s the backstory: (after the jump)

Last month a California Court of Appeals ruled that Safeco had to give our lawyers access to their files to identify Safeco customers who were surcharged in violation of California law.  As the Los Angeles DailyJournal reported:

In a published opinion that loosens limits on consumer class
actions, an appellate court said Safeco Insurance Co. must disclose
which customers it allegedly surcharged illegally several years ago.

The rub is that the customer list, if produced, could identify hundreds
– even thousands – of new plaintiffs in an on-going complaint against
the Seattle-based auto insurer.

In 2002, after investigating Safeco’s auto insurance application
process, Consumer Watchdog sued the company for violating California law, which
forbids insurers from surcharging or refusing to insure motorists just
because they previously did not have insurance. The suit also charges
that Safeco failed to disclose its practices to the Insurance
Commissioner – a separate violation of the law.

In 2004 insurers and other big businesses won passage of Prop 64 — claiming to stop "shakedown lawsuits" but actually attacking the rights of consumer and environmental groups to hold corporate cheats accountable.  Later, Safeco cited that initiative to say that Consumer Watchdog could not bring this lawsuit on behalf of the public.
A volunteer stepped forward to continue the suit, but the trial court
determined that she was not a proper plaintiff. 

Based on the fact that it was quite evident that Safeco engaged in the improper practice, the Court ordered Safeco to provide a list of the people who were surcharged, so
they could have an opportunity to participate in the litigation. The Court of Appeal agreed so Safeco has gone to the Supreme Court hoping to block accountability.

A decision by the Cal Supreme Court whether or not to review the case is expected soon.