The Insurance Commissioner did not abuse his discretion in denying Mercury’s request to raise its auto insurance rates.  Mercury’s advertising expenses were properly excluded from the rate calculation because the ads promoted the Mercury group of companies rather than the company that insured autos or provided consumers with information helpful in choosing auto insurance.  Also, the Commissioner correctly held that the test for whether the regulated rate is “confiscatory” is whether it causes the insurer “deep financial hardship,” not the less onerous standard that Mercury championed.

California Court of Appeal, Third District (Robie, J.); February 10, 2017; 2017 WL 543322