Mercury Insurance Group, which is bankrolling a controversial ballot initiative on car insurance, was accused by state regulators Monday of overcharging California motorists and homeowners for coverage.
The state's third largest car insurer, Mercury "may have illegally overcharged thousands of Californians," according to the state Department of Insurance. A spokesman for the department, Darrell Ng, said it wasn't immediately clear how widespread the alleged violations were or how big a fine Mercury would face if the charges prove true.
Nonetheless, the department said Mercury has already made refunds totaling $77,853 because of the problems uncovered by department investigators. Mercury controls about 10 percent of the California car insurance market.
The charges stem from a routine exam conducted in spring 2007. Investigators found that Mercury appeared to have "disregarded California's consumer protection statutes and overcharged consumers," Insurance Commissioner Steve Poizner said in a press release.
Mercury said it will fight the charges, saying "we don't engage in practices that would overcharge our customers." The insurer accused Poizner, who is running for the Republican nomination for governor, of publicizing the allegations to advance his "political interests."
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