Mercury General Corp. will pay $41.2 million to the California Department of Insurance to settle a case and a related false advertising action that had been pending the outcome of that case.
The case arose from a notice of noncompliance originally issued by the regulator in February 2004. The company has not admitted to any allegations raised in the case.
As of June 30, the company had approximately $35 million in other liabilities in its consolidated balance sheets to pay for the settlement, including an accrual for interest payments. As a result of the settlement, the company will recognize approximately $5 million of incremental expense, net of tax benefit, in its third-quarter results.
