The U.S. Supreme Court declined to hear Mercury Insurance Co.'s appeal to overturn a California Court of Appeal ruling that held Insurance Commissioner Dave Jones' 2013 order requiring the insurer to reduce its homeowner insurance rates.

The appeals court agreed with the commissioner that Mercury Insurance was bound by Proposition 103, which limits the advertising costs that insurers may pass on to consumers through insurance premiums.

The appeals court also agreed with the commissioner that Mercury Insurance could seek a variance from the formula if the insurer established the rate would cause deep financial hardship. However, the insurer did not try to prove that the rate caused it any kind of hardship, according to a news release from the California Department of Insurance.

Mercury Insurance also unsuccessfully argued to the appeals court that it had a constitutional right to charge ratepayers for brand advertising that only benefits shareholders, not ratepayers.

In 2017, Mercury Insurance submitted a petition for review of the California Court of Appeal's ruling, but it was thrown out by the Supreme Court of California.

Mercury Insurance did not immediately respond to S&P Global Market Intelligence's request for comment outside business hours.