An insurer which imposed improper charges on customers cannot reimburse them with coupons requiring them to buy more of that carrier's insurance, a California judge ruled in rejecting a class action settlement.

It was the second time Los Angeles County Superior Court Judge Victoria G. Chaney has ruled out a coupon settlement in the case of Donabedian v. Mercury Insurance.

Plaintiffs have sued Los Angeles-based Mercury accusing the firm of improperly surcharging policyholders because they were previously uninsured or had a lapse in coverage. Such surcharges are specifically prohibited by Proposition 103, which also permits consumers to sue insurance companies for refunds when they violate its requirements.

Recommended For You

Want to continue reading?
Become a Free PropertyCasualty360 Digital Reader

Your access to unlimited PropertyCasualty360 content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking insurance news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Insurance Speak podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical converage of the employee benefits and financial advisory markets on our other ALM sites, BenefitsPRO and ThinkAdvisor
NOT FOR REPRINT

© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.