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 LOS ANGELES, Dec. 13 /PRNewswire/ -- Mercury General Corp., the parent company of the Mercury Insurance Group, California's seventh- largest automobile insurer and one of the first to settle its Proposition 103 rate refund liability with the disbursement to its customers of over $43 million in 1992, announced today that it had filed on Dec. 8, 1993, an application with the California Department of Insurance to reduce its full-coverage base rates for private passenger automobile insurance for risks new to the company and its agents by approximately 20 percent. The proposed rate reduction reflects favorable loss experience over the last several years, particularly in the bodily injury liability lines. Loss experience in the physical damage lines has not been as favorable, and the proposed rates shift some of the premium income from the liability lines to the physical damage lines.
 Examples of Mercury's current and proposed rates included in the filing showed that a new single male customer with nine years of driving experience, driving a 1993 Chevrolet Cavalier Coupe, and qualifying for the "good driver" discount of 20 percent, would be charged 19 percent to 22 percent less for full liability and physical damage coverage under the proposed rates depending on where the insured lives. In San Jose, such full-coverage rates would be reduced from $502 to $392; in San Diego, $647 to $510; in Anaheim, $729 to $583; and, in Los Angeles, where rates are the highest, from $1,408 to $1,134.
 Mercury's new rating plan replaces an earlier application which was withdrawn in early November in order to avoid the substantial delays and expenses of protracted hearings which would have resulted from the intervention of a consumer interest group which had opposed the application. That plan, expected to have become effective in September 1993, provided for an overall reduction in premium revenue of about $7.2 million, and included some minor increases or decreases for existing policyholders. The opposition to the withdrawn rate filing was, in large part, related to proposed increases in rates on the physical damage lines only (coverage that is rarely sold separately) which exceeded 7 percent, even though the plan produced an overall reduction in full-coverage rates. Under the revised Insurance Code, the Insurance Commissioner is required to grant such requests if proposed rate changes on any single line exceed 7 percent. Mercury's revised filing is similarly structured and contains no increases on any single line as much as 7 percent. It also provides for certain other refinements designed to overcome some of the consumer group's objections, and represents a slightly greater reduction in total premium revenue, $7.8 million vs. $7.2 million.
 Some other consumer groups have indicated to Mercury that they were disappointed by the withdrawal of the previous rate filing, which has delayed by many months the realization of substantially lower automobile insurance rates for many thousands of California consumers.
 One such consumer group is the Latino Issues Forum, which is concerned about the high cost of auto insurance for young minority drivers, and has indicated support for Mercury's efforts to reduce rates for those who can least afford high rates: young, inner-city minority drivers. A spokesman for Latino Issues Forum said: "The vast majority of all new young drivers in California are minorities -- 85 percent of all new households formed in California are minority according to a recent Pacific Telesis study. Consequently, an emphasis on assisting young drivers is welcomed by the minority community, particularly since most young minorities lack the financial resources during a recessionary economy to bear significant rate increases. In effect, Mercury's decision is a pro-minority, pro-inner city decision."
 The Department of Insurance is required by law to complete its review of the new rates within 60 days of receipt of the filing, with the rates at that time deemed approved unless a hearing is ordered. If the rates are approved within that time period, Mercury expects to implement such rates before the end of the first quarter in 1994.
 -0- 12/13/93
 /CONTACT: Keith L. Parker, CFO, of Mercury, 213-937-1060/

CO: Mercury Insurance Group; Mercury General Corp. ST: California IN: AUT INS SU:

MF-JL -- LA009 -- 3132 12/13/93 11:30 EST
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Publication:PR Newswire
Date:Dec 13, 1993

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