Judge Rejects Mercury Suit Against Insurance Commissioner

0

A Sacramento judge has ruled that California’s Insurance Commissioner has the legal authority to lower insurance industry premiums in an effort to stop certain advertising costs from being passed on to consumers through higher premiums.

California voters gave the commissioner that power when they passed Proposition 103 in 1988.

Mercury Casualty Co., a division of Mercury General Corp. in Los Angeles, sued Commissioner Dave Jones in 2013, challenging his order to reduce Mercury homeowner insurance rates.

Five major insurance industry trade groups subsequently joined the lawsuit, which argued that Jones’ order violated the insurer’s First Amendment rights by imposing a financial penalty on its content-based speech, which includes expenditures such as corporate and event sponsorships.

But Judge Shelley Anne W. L. Chang issued a tentative ruling Wednesday rejecting their claims. Chang wrote that the law does not present an “impermissible restriction on commercial speech.”

A Mercury spokesman said the company plans to appeal the decision but declined to comment further.

No posts to display