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Mercury General seeks refund of $27.6M fine in California

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Mercury General seeks refund of $27.6M fine in California

Mercury GeneralCorp. wants the California Department of Insurance to refund the$27.6 million fine itpaid for allegedly charging broker fees that violate state's rate laws,according to a Form 10-K filed Feb. 9.

Mercury General said it a year earlier filed a writ ofadministrative mandamus and complaint for declaratory relief in the OrangeCounty Superior Court, seeking to require the state's insurance commissioner tovacate the order that imposed the fine. The order states the insurers' brokerswere actually operating as de facto agents and that the broker fees charged bythe agents constitute the charging of premium in excess of the company'sapproved rates.

The insurer also said it seeks to stay the order while theSuperior Court action is pending and to judicially declare the commissioner'sinterpretation of certain provisions of the state insurance code as invalid.The court, however, did not order a stay, and the penalty was accrued in 2014and paid in March 2015. The insurer on Sept. 11, 2015, filed an amended writ,adding an explicit request for a refund of the penalty, with interest.

A hearing for Mercury General's appeal was moved to June 13from March 14 after the insurance commissioner requested an extension.