Mercury Insurance 2012 Annual Report Download - page 33

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12
An insurance company is also required to notify the California DOI of any dividend after declaration, but prior to
payment. There are similar limitations imposed by other states on the Insurance Companies’ ability to pay dividends. As of
December 31, 2012, the Insurance Companies are permitted to pay in 2013, without obtaining DOI approval for extraordinary
dividends, $154.6 million in dividends to Mercury General, of which $133.9 million is payable from the California Companies.
The Holding Company Act also provides that the acquisition or change of “control” of a California domiciled insurance
company or of any person who controls such an insurance company cannot be consummated without the prior approval of the
California DOI. In general, a presumption of “control” arises from the ownership of voting securities and securities that are
convertible into voting securities, which in the aggregate constitute 10% or more of the voting securities of a California insurance
company or of a person that controls a California insurance company, such as Mercury General. A person seeking to acquire
“control,” directly or indirectly, of the Company must generally file with the California DOI an application for change of control
containing certain information required by statute and published regulations and provide a copy of the application to the
Company. The Holding Company Act also effectively restricts the Company from consummating certain reorganizations or mergers
without prior regulatory approval.
Each of the Insurance Companies is subject to holding company regulations in the state in which it is domiciled. These
provisions are substantially similar to those of the Holding Company Act.
Assigned Risks
Automobile liability insurers in California are required to sell BI liability, property damage liability, medical expense, and
uninsured motorist coverage to a proportionate number (based on the insurer’s share of the California automobile casualty insurance
market) of those drivers applying for placement as “assigned risks.” Drivers seek placement as assigned risks because their driving
records or other relevant characteristics, as defined by Proposition 103, make them difficult to insure in the voluntary market. In
2012, assigned risks represented less than 0.1% of total automobile direct premiums written and less than 0.1% of total automobile
direct premium earned. The Company attributes the low level of assignments to the competitive voluntary market. Many of the
other states in which the Company conducts business offer programs similar to that of California. These programs are not a
significant contributor to the business written in those states.
Executive Officers of the Company
The following table presents certain information concerning the executive officers of the Company as of February 1, 2013:
Name Age Position
George Joseph 91 Chairman of the Board
Gabriel Tirador 48 President and Chief Executive Officer
Allan Lubitz 54 Senior Vice President and Chief Information Officer
Joanna Y. Moore 57 Senior Vice President and Chief Claims Officer
John Sutton 65 Senior Vice President—Customer Service
Christopher Graves 47 Vice President and Chief Investment Officer
Robert Houlihan 56 Vice President and Chief Product Officer
Kenneth G. Kitzmiller 66 Vice President and Chief Underwriting Officer
Brandt N. Minnich 46 Vice President—Marketing
Theodore R. Stalick 49 Vice President and Chief Financial Officer
Charles Toney 51 Vice President and Chief Actuary
Judy A. Walters 66 Vice President—Corporate Affairs and Secretary
Mr. Joseph, Chairman of the Board of Directors, has served in this capacity since 1961. He held the position of Chief
Executive Officer of the Company for 45 years from 1961 through December 2006. Mr. Joseph has more than 50 years’ experience
in the property and casualty insurance business.
Mr. Tirador, President and Chief Executive Officer, served as the Company’s assistant controller from 1994 to 1996. In
1997 and 1998, he served as the Vice President and Controller of the Automobile Club of Southern California. He rejoined the
Company in 1998 as Vice President and Chief Financial Officer. He was appointed President and Chief Operating Officer in