Mercury Insurance Chairman George Joseph contributed $8.1 million to a campaign aiming to qualify a controversial car insurance initiative for California's June 2012 ballot.
Dubbed the 2012 Auto Insurance Discount Act, the measure would let insurers consider a driver's coverage history when setting car insurance premiums, a practice currently prohibited in California. The initiative is similar to the voter-defeated Proposition 17, which Mercury sponsored in 2010.
Proponents say the measure would improve access to affordable car insurance by allowing customers who have maintained coverage for five years to qualify for discounts.
But opponents say it would create higher car insurance rates for millions of other customers. The non-profit consumer advocate group Consumer Watchdog estimates surcharges for customers who had not purchased auto insurance sometime in the last five years could increase premiums by as much as 40 percent.
"The question is simple; would an insurance chairman spend over $8 million to give drivers a discount? The truth is that Mercury will spend tens of millions of dollars in order to raise prices, not lower them," said Brian Stedge-Stroud, a Consumer Watchdog advocate, in a prepared statement.