May 7, 2019…

A state appeals court says Mercury Insurance Co. must pay $27.5 million to California for charging its customers illegal fees.

On Tuesday, the court in Santa Ana reinstated a 2015 fine issued by the Department of Insurance. The department said Mercury allowed its auto insurance agents to charge up to $150 in unapproved fees on top of state-approved premiums.

The company collected more than $27 million in fees on more than 180,000 transactions from 1999 to 2004. The insurer argued the costs were legal broker fees.

A judge in Orange County overturned the fine in 2016 but the Fourth District Court of Appeal ruled the Mercury agents weren’t brokers and couldn’t charge fees.

Mercury tells the San Francisco Chronicle it’s disappointed and will weigh its options, including appeal.