Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2012

Condensed Financial Information of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of Registrant

SCHEDULE II MERCURY GENERAL CORPORATION CONDENSED FINANCIAL INFORMATION OF REGISTRANT BALANCE SHEETS
	December 31,
	2012		2011
	(Amounts in thousands)
ASSETS
Investments, at fair value:
Equity securities (cost $31,178; $24,885)	$	27,127	$	20,282
Short-term investments (cost $47,174; $26,817)	47,174		26,817
Investment in subsidiaries	1,760,760		1,787,047
Total investments	1,835,061		1,834,146
Cash	10,199		29,219
Accrued investment income	4		17
Amounts receivable from affiliates	200		200
Current income taxes	6,333		22
Deferred income taxes	729		1,654
Income tax receivable from affiliates	6,182		12,833
Total assets	$	1,858,708	$	1,878,091
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable and accrued expenses	$	47	$	48
Amounts payable to affiliates	95		0
Income tax payable to affiliates	16,069		20,288
Other liabilities	0		272
Total liabilities	16,211		20,608
Shareholders’ equity:
Common stock	79,380		76,634
Additional paid in capital	0		538
Retained earnings	1,763,117		1,780,311
Total shareholders’ equity	1,842,497		1,857,483
Total liabilities and shareholders’ equity	$	1,858,708	$	1,878,091

SCHEDULE II, Continued MERCURY GENERAL CORPORATION CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF OPERATIONS
	Year Ended December 31,
	2012			2011			2010
	(Amounts in thousands)
Revenues:
Net investment income	$	1,114		$	1,411		$	951
Net realized investment gains (losses)	697			(1,866		)	1,420
Total revenues	1,811			(455		)	2,371
Expenses:
Other operating expenses	1,688			2,267			12,945
Interest	0			1,341			2,180
Total expenses	1,688			3,608			15,125
Income (loss) before income taxes and equity in net income of subsidiaries	123			(4,063		)	(12,754		)
Income tax expense (benefit)	1,800			(684		)	(3,507		)
Loss before equity in net income of subsidiaries	(1,677		)	(3,379		)	(9,247		)
Equity in net income of subsidiaries	118,588			194,543			161,445
Net income	$	116,911		$	191,164		$	152,198

STATEMENTS OF COMPREHENSIVE INCOME

	Year Ended December 31,
	2012		2011		2010
	(Amounts in thousands)
Net income	$	116,911	$	191,164	$	152,198
Other comprehensive income (loss), before tax:
Gains (losses) on hedging instrument	0		1,139		(220		)
Other comprehensive income (loss), before tax	0		1,139		(220		)
Income tax expense (benefit) related to gains (losses) on hedging instrument	0		399		(77		)
Other comprehensive income (loss), net of tax:	0		740		(143		)
Comprehensive income	$	116,911	$	191,904	$	152,055

SCHEDULE II, Continued MERCURY GENERAL CORPORATION CONDENSED FINANCIAL INFORMATION OF REGISTRANT STATEMENTS OF CASH FLOWS
	Year Ended December 31,
	2012			2011			2010
	(Amounts in thousands)
Cash flows from operating activities:
Net cash used in operating activities	$	(5,590	)	$	(312	)	$	(4,441	)
Cash flows from investing activities:
Dividends from subsidiaries	145,000			270,000			128,000
Fixed maturity securities:
Calls or maturities	0			0			265
Equity securities:
Purchases	(14,102		)	(50,056		)	(836		)
Sales	7,308			43,520			2,070
Calls	0			0			895
Net increase in short-term investments	(20,413		)	(21,451		)	(583		)
Other, net	304			1,047			(110		)
Net cash provided by investing activities	118,097			243,060			129,701
Cash flows from financing activities:
Dividends paid to shareholders	(134,105		)	(132,142		)	(129,863		)
Excess tax benefit from exercise of stock options	86			56			132
Payment to retire senior notes	0			(125,000		)	0
Proceeds from stock options exercised	2,492			1,951			733
Net cash used in financing activities	(131,527		)	(255,135		)	(128,998		)
Net decrease in cash	(19,020		)	(12,387		)	(3,738		)
Cash:
Beginning of year	29,219			41,606			45,344
End of year	$	10,199		$	29,219		$	41,606
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest paid	$	0		$	1,932		$	1,972
Income taxes paid (received)	$	4,667		$	(1,252	)	$	(8,755	)

The accompanying condensed financial information should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements included in this report.

Dividends

Dividends of $145,000,000, $270,000,000, and $128,000,000 were received by the Company from its 100% owned subsidiaries in 2012, 2011, and 2010, respectively, and are recorded as a reduction to investment in subsidiaries.

Capitalization of Subsidiaries

Mercury General made capital contributions to its insurance subsidiaries of $125,000 in each of 2012, 2011, and 2010.

Guarantees

The borrowings by MCC, a subsidiary, under the $120 million credit facility and $20 million bank loan are secured by approximately $182 million of municipal bonds owned by MCC, at fair value, held as collateral. The total borrowings of $140 million are guaranteed by the Company.

Federal Income Taxes

The Company files a consolidated federal income tax return with the following subsidiaries:

Mercury Casualty Company	Mercury Insurance Company of Florida
Mercury Insurance Company	Mercury Indemnity Company of America
California Automobile Insurance Company	Mercury Select Management Company, Inc.
California General Underwriters Insurance Company, Inc.	American Mercury MGA, Inc.
Mercury Insurance Company of Illinois	Concord Insurance Services, Inc.
Mercury Insurance Company of Georgia	Mercury Insurance Services LLC
Mercury Indemnity Company of Georgia	Mercury Group, Inc.
Mercury National Insurance Company	AIS Management LLC
American Mercury Insurance Company	Auto Insurance Specialists LLC
American Mercury Lloyds Insurance Company	PoliSeek AIS Insurance Solutions, Inc.
Mercury County Mutual Insurance Company

The method of allocation between the companies is subject to an agreement approved by the Board of Directors. Allocation is based upon separate return calculations with current credit for net losses incurred by the insurance subsidiaries to the extent it can be used in the current consolidated return.