Laws for Sale: How Mercury Insurance is Buying Legislation in California
According to a recent poll, 66% of Americans believe that the distribution of wealth in America is unfair. This sentiment has been general in nature. The Occupy Wall Street movement, which has enjoyed large public moral support, has been criticized for failing to make specific demands.
Here then is a specific example of how the rich are able to abuse their wealth and buy laws from our government. It's happening right now in California, where a large insurance company has sponsored and funded a potential misleading piece of legislation that impacts people's car insurance rates.
By law, California requires each driver have basic car liability insurance. However even this minimum can be difficult for many Californians to afford. While the state does have a program for extremely low income drivers, there are millions in between extreme poverty and the Middle Class who are impacted by rate changes.
In 1988, voters passed Proposition 103 in California despite a $60 million ad campaign by various insurance companies to defeat it. The Proposition effectively rolled back insurance rates and instituted a number of consumer protections.
Now, Mercury Insurance in sponsoring a 2012 piece of legislation called the "2012 Auto Insurance Discount Act". George Joseph, chairman of Mercury, has already contributed $8.1 million to PAC supporting this law. This legislation would legalize surcharges by Mercury and other insurance carriers that are currently prohibited by law.
The bill also repeals provisions in Prop 103 that prohibit using a driver's insurance history to determine rates. Now, here's the rub. The insurance companies say that eliminating these provisions will help save drivers money. But consumer advocates say this will allow insurance providers to raise rates by 40% on millions of Californians.Continued on the next page