Mercury Insurance 2009 Annual Report Download - page 44

Download and view the complete annual report

Please find page 44 of the 2009 Mercury Insurance annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 132

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132

withdrawing one or more lines of insurance business from the state unless prior approval is received from the
state insurance department. In some states, these regulations extend to significant reductions in the amount of
insurance written, not just to a complete withdrawal. Laws and regulations that limit the Company’s ability to
cancel and non-renew policies in some states or locations and that subject withdrawal plans to prior approval
requirements may restrict the Company’s ability to exit unprofitable markets, which may harm its business and
results of operations.
Other Regulations. The Company must also comply with regulations involving, among other matters:
• the use of non-public consumer information and related privacy issues;
• the use of credit history in underwriting and rating;
• limitations on the ability to charge policy fees;
• limitations on types and amounts of investments;
• the payment of dividends;
• the acquisition or disposition of an insurance company or of any company controlling an insurance
company;
• involuntary assignments of high-risk policies, participation in reinsurance facilities and underwriting
associations, assessments and other governmental charges;
• reporting with respect to financial condition;
• periodic financial and market conduct examinations performed by state insurance department
examiners; and
• the other regulations discussed in this Annual Report on Form 10-K.
The failure to comply with these laws and regulations may also result in actions by regulators, fines and
penalties, and in extreme cases, revocation of the Company’s ability to do business in that jurisdiction. In
addition, the Company may face individual and class action lawsuits by insured and other parties for alleged
violations of certain of these laws or regulations.
In addition, from time to time, the Company may support or oppose legislation or other amendments to
insurance regulations in California or other states in which it operates. Consequently, the Company may receive
negative publicity related to its support or opposition of legislative or regulatory changes that may have a
material adverse effect on the Company’s financial condition and results of operations. Currently, the Company
is supporting the CCAIDA. See “Item 1. Business—Regulation—Department of Insurance Oversight” for further
details.
Regulation may become more extensive in the future, which may adversely affect the Company’s business
and results of operations.
No assurance can be given that states will not make existing insurance-related laws and regulations more
restrictive in the future or enact new restrictive laws. New or more restrictive regulation in any state in which the
Company conducts business could make it more expensive for it to continue to conduct business in these states,
restrict the premiums the Company is able to charge or otherwise change the way the Company does business. In
such events, the Company may seek to reduce its writings in or to withdraw entirely from these states. In
addition, from time to time, the United States Congress and certain federal agencies investigate the current
condition of the insurance industry to determine whether federal regulation is necessary. The Company cannot
predict whether and to what extent new laws and regulations that would affect its business will be adopted, the
timing of any such adoption and what effects, if any, they may have on the Company’s results of operations,
profitability, and financial condition.
26