Aug. 12 — Backers of an automobile insurance initiative that was bankrolled by Mercury General Corp., and which voters turned down last year, want to try again.

The California attorney general's office this week released a title and summary of the proposed initiative, which was submitted by Mike D'Arelli, executive director of the American Agents Alliance, an insurance trade group. It's the first step in the process of putting a measure on the ballot.

The initiative is similar to Proposition 17, which was defeated in the June 2010 election even after Mercury spent about $16 million on a statewide media campaign.

The new proposal, like the defeated one, would allow insurance companies to give discounts to motorists who have had years of continuous coverage, regardless of whether those years were all with the same insurer.

"The way the law is written now rewards insurance companies," D'Arelli said in a statement. "We believe that giving the consumers control over their discounts will increase competition between insurance companies, lower costs and insure more people."

Consumer groups, however, said the proposed initiative would raise insurance costs for the people who can least afford it: the previously uninsured, including the working poor and new drivers. The initiative, according to the Santa Monica-based Consumer Watchdog group, "authorizes a currently prohibited surcharge on millions of California motorists who did not purchase insurance at some point in the prior five years, even if they had not been driving or did not own a car."

George Joseph, Mercury's chairman, has been trying for years to overturn parts of Proposition 103, a automobile insurance reform initiative approved by voters in 1988, to allow for the "persistency discount" for continuously insured drivers. The law change could have given Mercury, which has extremely competitive rates, an advantage in attracting low-risk customers away from other big insurers, analysts said.

To date, though, Joseph has had no success with the courts, the Legislature or initiatives in this area.

The latest effort technically is not being directly backed by Mercury, Mercury spokesman Shane Smith said. Joseph is personally supporting the initiative, along with the alliance and other industry representatives, he said.