Mercury Insurance Wins Judgment Vacating CDI Penalty

On behalf of Mercury Insurance Company, Skadden won a motion for judgment on a petition for writ of mandate, vacating a $27.6 million penalty imposed by the California Department of Insurance (CDI). On August 12, Judge Gail Andler of the Superior Court of California in Orange County held that Mercury did not violate the Insurance Code when it did not report to the CDI broker fees charged by its de facto agent as "premium" paid by Mercury customers in return for insurance coverage. Judge Andler held that the fees were not "premium" because they were not part of the cost of a Mercury policy, but were separate fees paid to the de facto agent for comparison shopping services among many insurers, before a policy was selected.