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California court orders insurance company to disclose surcharges

A California appeals court has ordered an auto insurance company to disclose which of its customers it surcharged due to their lack of prior continuous auto insurance coverage.

Plaintiffs in the case have argued that the insurance company violated the state's landmark insurance law, proposition 103. A lower court ruled the insurance company must disclose the insurance customers it charged for lack of continuous coverage, which the company then appealed.

Harvey Rosenfield, author of proposition 103 and an attorney for Consumer Watchdog, a California-based non-profit organization, said the court ordered disclosure means consumers can be compensated for the overcharges.

Consumer Watchdog sued the company in Los Angeles Superior Court in 2002, for violating California's insurance code and for failure to disclose its practices to the California Insurance Commissioner.

The insurance company argued that Consumer Watchdog could not bring this lawsuit on behalf of the public, which led to the present appeal.

Los Angeles Superior Court Judge Anthony Mohr issued the order based on "what appears to be direct evidence, to the effect that the defendant had a surcharge policy based on a lack of prior insurance. This justifies allowing the discovery plaintiff seeks."

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