Like many Californians, I was burned by Mercury auto insurance in the 90’s. After my rates went up, despite a "discounted" quote by the agent, I was left wondering what, exactly, I had done. It took me a couple of years, but I eventually went through the headache of swapping carriers.

Now, California’s Insurance Commissioner Steve Poizner has released a well-documented, 275-page report that details some of the, um, indiscretions used by Mercury Insurance that violate Proposition 103, a law enacted in 1988. Ah yes, the 80’s are still coming back to bite us in the ass…

Santa Monica based Consumer Watchdog reports Mercury may have committed the following violations:

• Mercury discriminated against members of the military.

• Mercury refused to sell insurance to people in certain jobs, including people in the entertainment industry, artists, longshoreman, “domestics” and other “unacceptable” occupations, or adopted rules that made it more difficult for people in those jobs to buy insurance.

• Mercury illegally surcharged people who did not previously have auto insurance, a practice that Proposition 17, if passed, would allow.

• Mercury had a “physically-impaired” rule, under which the company required some diabetics, cardiovascular patients, and people “who suffer[ed] from some other medical condition” to provide Mercury with a medical examination report, or else be denied auto or umbrella coverage.

• Mercury also discriminated against “people who work out of their homes and have one source of income” and “people who are self-employed and working out of their homes.”

• Mercury “declined to write a homeowners policy for two unrelated men who were co-owners of a dwelling.” Mercury also refused to sell a renters policy to unmarried people living together.

• Mercury increased its prices above the amounts its agents quoted to applicants. Mercury also collected more money in premiums than it was authorized to.

• Mercury requested information on an applicant’s national origin, information that could have been illegally used by underwriters.

• Mercury refused to provide immediate coverage under an umbrella policy to people who were unemployed.

• Mercury discriminated against students from other countries.

• Mercury would surcharge people for accidents even though they were not at fault, or for traffic violations when the customer had not been convicted.

• Mercury maintained an incentive program that encouraged its underwriters to deviate from company rules in order to reject applications.

• Mercury overcharged policyholders by denying them discounts they were entitled to.

Now, the group "Californians for Fair Auto Insurance Rates" supports Prop. 17, and guess who is funding CFAIR? Mercury Insurance has backed with $3.5 million in funding in 2009. Prop. 17 would allow insurance agencies to add surcharges on insurance for customers who have let their insurance to expire or were previously uninsured drivers.

This is a bold move by Poizner to rally against a major California corporation, and threatens to "come down on them (Mercury) like a ton of bricks" if the state finds the allegations worthy of action. Mercury is a donation powerhouse that holds clout in the lobbying of future California politicians. Consumer Watchdog Harvey Rosenfield, in a report by SF Gate, said Poizner "deserves accolades for disclosing an examination that is important for the public to consider – not just customers of Mercury but voters who will have to assess the credibility of this initiative." Others may argue this is a move Poizner held off addressing the issue until a choice moment in time, as he now prepares to go on the prowl to become California’s next Governor.

Rosenfield is responsible for writing Proposition 103 and has asked the State Attorney General to change the language on the initiative to help clarify the confusing language.