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<SEC-DOCUMENT>0001275287-06-005768.txt : 20061106
<SEC-HEADER>0001275287-06-005768.hdr.sgml : 20061106
<ACCEPTANCE-DATETIME>20061106121416
ACCESSION NUMBER:		0001275287-06-005768
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20061106
ITEM INFORMATION:		Results of Operations and Financial Condition
ITEM INFORMATION:		Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20061106
DATE AS OF CHANGE:		20061106

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MERCURY GENERAL CORP
		CENTRAL INDEX KEY:			0000064996
		STANDARD INDUSTRIAL CLASSIFICATION:	FIRE, MARINE & CASUALTY INSURANCE [6331]
		IRS NUMBER:				952211612
		STATE OF INCORPORATION:			CA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-12257
		FILM NUMBER:		061189277

	BUSINESS ADDRESS:	
		STREET 1:		4484 WILSHIRE BLVD
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90010
		BUSINESS PHONE:		2139371060

	MAIL ADDRESS:	
		STREET 1:		4484 WILSHIRE BLVD
		CITY:			LOS ANGELES
		STATE:			CA
		ZIP:			90010
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>mg7782.txt
<DESCRIPTION>FORM 8-K
<TEXT>
================================================================================

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   ----------

                                    FORM 8-K

                                 CURRENT REPORT
     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

       Date of Report (Date of earliest event reported): November 6, 2006

                           MERCURY GENERAL CORPORATION
               (Exact Name of Registrant as Specified in Charter)

           CALIFORNIA                  001-12257               95-221-1612
  -----------------------------       ------------         -------------------
  (State or Other Jurisdiction        (Commission           (I.R.S. Employer
       of Incorporation)              File Number)         Identification No.)

                             4484 Wilshire Boulevard
                          Los Angeles, California 90010
                    (Address of Principal Executive Offices)

                                   ----------

                                 (323) 937-1060
              (Registrant's telephone number, including area code)

                                   ----------

                                 Not applicable
          (Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ]  Written communications pursuant to Rule 425 under the Securities
     Act (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 425 under the Exchange
     Act (17 CFR 240.14.a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))

================================================================================

<PAGE>

ITEM 2.02.   RESULTS OF OPERATIONS AND FINANCIAL CONDITION

             The following information is furnished pursuant to Item 2.02,
"Results of Operations and Financial Condition," and shall not be deemed "filed"
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended,
or otherwise subject to the liabilities of that section.

             On November 6, 2006, Mercury General Corporation (the "Company")
issued a press release announcing its financial results for the third quarter
and nine month period ended September 30, 2006. A copy of the press release is
attached hereto as Exhibit 99.1.

             The information contained in this Current Report, including the
exhibit, shall not be incorporated by reference into any filing of Mercury
General Corporation, whether made before or after the date hereof, regardless of
any general incorporation language in such filing.

ITEM 5.02    DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF
             DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS

             On November 3, 2006, George Joseph, the Company's Chief Executive
Officer and Chairman of the Board, announced his intention to resign from his
position as Chief Executive Officer of the Company effective January 1, 2007.
Mr. Joseph will continue to serve as Chairman of the Board of Directors of the
Company.

             Gabriel Tirador, currently President and Chief Operating Officer of
the Company, was appointed Chief Executive Officer of the Company effective upon
Mr. Joseph's resignation. Following his appointment, Mr. Tirador will serve as
President and Chief Executive Officer of the Company. Mr. Tirador has served as
President and Chief Operating Officer of the Company since October 2001. He was
the Company's Vice President and Chief Financial Officer from February 1998
until October 2001. Mr. Tirador has over 20 years experience in the property and
casualty insurance industry and is a certified public accountant.

             There are no family relationships between Mr. Tirador and any
director or executive officer of the Company which would require disclosure
under Item 401(d) of Regulation S-K. Other than with respect to his employment
with the Company, there are no transactions between Mr. Tirador or any of his
immediate family members and the Company or any of its subsidiaries which would
require disclosure under Item 404(a) of Regulation S-K. Mr. Tirador's salary
will continue at the current level and he will continue to be eligible to
participate in the Company's equity compensation and other benefits plans on the
same terms as the Company's other executive officers. He will also continue to
participate in the Company's Senior Executive Bonus Plan. Mr. Tirador's
employment arrangement is at-will.

ITEM 9.01.   FINANCIAL STATEMENTS AND EXHIBITS

             (d)   Exhibits.
                   ---------

                   99.1     Press Release, dated November 6, 2006, issued by
                            Mercury General Corporation, furnished pursuant to
                            Item 2.02 of Form 8-K.

                                       -2-
<PAGE>

                                   SIGNATURES

             Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.

Date: November 6, 2006                            MERCURY GENERAL CORPORATION


                                                  By:   /s/ THEODORE STALICK
                                                        ------------------------
                                                  Name: Theodore Stalick
                                                  Its:  Chief Financial Officer

                                       -3-
<PAGE>

                                  EXHIBIT INDEX

Exhibit 99.1.   Press Release, dated November 6, 2006, issued by Mercury General
                Corporation.

                                       -4-
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>mg7782ex991.txt
<DESCRIPTION>EXHIBIT-99.1
<TEXT>
                                                                    Exhibit 99.1

           MERCURY GENERAL CORPORATION ANNOUNCES THIRD QUARTER RESULTS

             GABRIEL TIRADOR APPOINTED CEO EFFECTIVE JANUARY 1, 2007

    LOS ANGELES, Nov. 6 /PRNewswire-FirstCall/ -- Mercury General Corporation
(NYSE: MCY) reported today net income of $68.2 million ($1.25 per share-
diluted) in the third quarter 2006 compared with $73.0 million ($1.33 per
share-diluted) for the same period in 2005.  For the first nine months of
2006, net income was $164.7 million ($3.01 per share-diluted) compared with
net income of $207.0 million ($3.78 per share-diluted) for the same period in
2005.  Included in net income are net realized investment gains, net of tax,
of $1.7 million ($0.03 per share-diluted) in the third quarter of 2006
compared with net realized investment gains, net of tax, of $5.0 million
($0.09 per share-diluted) for the same period in 2005, and net realized
investment gains, net of tax, of $8.7 million ($0.16 per share-diluted) for
the first nine months of 2006 compared with net realized investment gains, net
of tax, of $10.0 million ($0.18 per share-diluted) for the same period in
2005.

    Company-wide net premiums written were $776.2 million in the third quarter
2006, a 1.7% increase over third quarter 2005 net premiums written of
$762.9 million, and were approximately $2.3 billion for the first nine months
of 2006, a 3.7% increase over the same period in 2005.  California net
premiums written were $573.1 million in the third quarter of 2006, an increase
of 5.1% over the same period in 2005, and were approximately $1.7 billion for
the first nine months of 2006, a 5.9% increase over the same period in 2005.
Non-California net premiums written were $203.1 million in the third quarter
of 2006, a 6.7% decrease over the same period in 2005, and were $612.8 million
for the first nine months of 2006, a decrease of 2.0% over the same period in
2005.

    The Company's combined ratio (GAAP basis) was 93.0% in the third quarter
and 94.5% for the first nine months of 2006 compared with 90.8% and 91.2% for
the same periods in 2005.  For the states outside of California, the Company
experienced adverse development for the nine months ended September 30, 2006
of approximately $37 million on prior accident years' loss reserves.  The loss
development primarily relates to additional reserves established for large
individual losses in Florida and additional reserves established for personal
injury protection and bodily injury losses in New Jersey.  As a result of
these developments, the Company also increased the implied severity for the
2006 accident year for Florida and New Jersey business.  The Company
experienced positive development on prior accident years' loss reserves of
approximately $19 million for the nine months ended September 30, 2006 on its
California business.

    Net investment income of $36.9 million (after tax $30.7 million) in the
third quarter of 2006 increased by 19.4% over the same period in 2005.  The
after-tax yield on investment income was 3.7% on average assets of
$3.4 billion (fixed maturities and equities at cost) for the quarter.  This
compares with an after tax yield on investment income of 3.4% on average
investments of $3.2 billion (fixed maturities and equities at cost) for the
same period in 2005.

    The Company announced that George Joseph, Chief Executive Officer and
Chairman of the Board, will resign as CEO effective January 1, 2007.  The
Board of Directors has appointed Gabriel Tirador to serve as President and
Chief Executive Officer effective January 1, 2007.  Mr. Tirador has served as
President and Chief Operating Officer since October 2001.  George Joseph will
remain as Chairman.

    The Board of Directors declared a third quarter dividend of $0.48 per
share, representing an 11.6% increase over the same period in 2005.  The
dividend is to be paid on December 28, 2006 to shareholders of record on
December 15, 2006.  The Company's book value per share at September 30, 2006
was $30.98.

<PAGE>

    Mercury General Corporation and its subsidiaries are a multiple line
insurance organization offering predominantly personal automobile and
homeowners insurance through a network of independent producers in many
states.  For more information, visit the Company's website at
www.mercuryinsurance.com.  The Company will be hosting a conference call and
webcast today at 10:00 A.M. Pacific time where management will discuss results
and address questions.  The teleconference and webcast can be accessed by
calling (877) 807-1888 (USA), (706) 679-3827 (International) or by visiting
www.mercuryinsurance.com.  A replay of the call will be available beginning at
1:30 P.M. Pacific time and running through November 13, 2006.  The replay
telephone numbers are (800) 642-1687 (USA) or (706) 645-9291 (International).
The conference ID# is 8732770.  The replay will also be available on the
Company's website shortly following the call.

    The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements.  The statements contained in
this press release are forward-looking statements based on the Company's
current expectations and beliefs concerning future developments and their
potential effects on the Company.  There can be no assurance that future
developments affecting the Company will be those anticipated by the Company.
Actual results may differ from those projected in the forward-looking
statements.  These forward-looking statements involve significant risks and
uncertainties (some of which are beyond the control of the Company) and are
subject to change based upon various factors, including but not limited to the
following risks and uncertainties: changes in the demand for the Company's
insurance products, inflation and in general economic conditions; the accuracy
and adequacy of the Company's pricing methodologies; adverse weather
conditions or natural disasters in the markets served by the Company; market
risks associated with the Company's investment portfolio; uncertainties
related to estimates, assumptions and projections generally; the possibility
that actual loss experience may vary adversely from the actuarial estimates
made to determine the Company's loss reserves in general; the Company's
ability to obtain and the timing of regulatory approval for requested rate
changes; legislation adverse to the automobile insurance industry or business
generally that may be enacted in California or other states; the Company's
success in expanding its business in states outside of California; the
Company's ability to successfully complete its initiative to standardize its
policies and procedures nationwide in all of its functional areas; the
presence of competitors with greater financial resources and the impact of
competitive pricing; changes in driving patterns and loss trends; acts of war
and terrorist activities; court decisions and trends in litigation and health
care and auto repair costs and marketing efforts; and various legal,
regulatory and litigation risks.  The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as the
result of new information, future events or otherwise.  For a more detailed
discussion of some of the foregoing risks and uncertainties, see the Company's
filings with the Securities and Exchange Commission.

    Mercury General Corporation

    Information Regarding Non-GAAP Measures

    The Company has presented information within this document containing
operating measures which in management's opinion provide investors with
useful, industry specific information to help them evaluate, and perform
meaningful comparisons of, the Company's performance, but that may not be
presented in accordance with Generally Accepted Accounting Principles
("GAAP").  These measures are not intended to replace, and should be read in
conjunction with, the GAAP financial results. The Company has reconciled these
measures with the most directly comparable GAAP measure in the supplemental
schedule entitled, "Summary of Operating Results."

    Net premiums written represents the premiums charged on policies issued
during a fiscal period.  Net premiums earned, the most directly comparable
GAAP measure, represents the portion of premiums written that is recognized as
income in the financial statements for the periods presented and earned on a
pro-rata basis over the term of the policies.  Net premiums written is meant
as supplemental information and is not intended to replace Net premiums
earned.  It should be read in conjunction with the GAAP financial results.

    Paid losses and loss adjustment expenses is the portion of Incurred losses
and loss adjustment expenses, the most directly comparable GAAP measure,
excluding the effects of changes in the loss reserve accounts.  Paid losses
and loss adjustment expenses is meant as supplemental information and is not
intended to replace Incurred losses and loss adjustment expenses.  It should
be read in conjunction with the GAAP financial results.

<PAGE>

                  Mercury General Corporation and Subsidiaries
                          Summary of Operating Results
                   (000's except per-share amounts and ratios)
                                   (unaudited)

<TABLE>
<CAPTION>
                                             Quarter Ended                 Nine Months Ended
                                             September 30,                   September 30,
                                      ----------------------------    ----------------------------
                                          2006            2005           2006            2005
                                      ------------    ------------    ------------    ------------
<S>                                   <C>             <C>             <C>             <C>
Net premiums written                  $    776,186    $    762,862    $  2,304,032    $  2,222,567
Net premiums earned                        753,122         722,899       2,243,152       2,114,874
Paid losses and loss
 adjustment expenses                       483,466         436,672       1,449,314       1,283,399
Incurred losses and loss
 adjustment expenses                       491,129         464,709       1,500,625       1,355,719
Net investment income                       36,857          30,857         112,502          90,343
Net realized investment
 gains, net of tax                           1,749           5,002           8,694          10,047
Net income                            $     68,227    $     73,014    $    164,685    $    207,040

Basic average shares outstanding            54,662          54,578          54,645          54,554

Diluted average shares
 outstanding                                54,750          54,739          54,760          54,715

Basic Per Share Data
Net income                            $       1.25    $       1.34    $       3.01    $       3.80

Net realized investment
 gains, net of tax                    $       0.03    $       0.09    $       0.16    $       0.18

Diluted Per Share Data
Net income                            $       1.25    $       1.33    $       3.01    $       3.78

Net realized investment
 gains, net of tax                    $       0.03    $       0.09    $       0.16    $       0.18

Operating Ratios
 -- GAAP (a) Basis
Loss ratio                                    65.2%           64.3%           66.9%           64.1%
Expense ratio                                 27.8%           26.5%           27.6%           27.1%
Combined ratio                                93.0%           90.8%           94.5%           91.2%

Reconciliations of Operating
 Measures to Comparable
 GAAP (a) Measures

Net premiums written                  $    776,186    $    762,862    $  2,304,032    $  2,222,567
Increase in unearned premiums              (23,064)        (39,963)        (60,880)       (107,693)
Net premiums earned                   $    753,122    $    722,899    $  2,243,152    $  2,114,874

Paid losses and loss
 adjustment expenses                  $    483,466    $    436,672    $  1,449,314    $  1,283,399
Increase in net loss and loss
 adjustment expense reserves                 7,663          28,037          51,311          72,320
Incurred losses and loss
 adjustment expenses                  $    491,129    $    464,709    $  1,500,625    $  1,355,719
</TABLE>

(a) Generally Accepted Accounting Principles

<PAGE>

                  Mercury General Corporation and Subsidiaries
                         Other Supplemental Information
                              (000's except ratios)
                                   (unaudited)

<TABLE>
<CAPTION>
                                             Quarter Ended                 Nine Months Ended
                                             September 30,                    September 30,
                                      ----------------------------    ----------------------------
                                          2006            2005            2006            2005
                                      ------------    ------------    ------------    ------------
<S>                                   <C>             <C>             <C>             <C>
Total California Operations (1)
Net Premiums Written                  $    573,136    $    545,293    $  1,691,188    $  1,597,283
Net Premiums Earned                        556,342         524,887       1,647,809       1,547,548

Loss Ratio                                    61.7%           62.5%           63.0%           63.3%
Expense Ratio                                 26.5%           25.1%           26.6%           25.4%
Combined Ratio                                88.2%           87.6%           89.6%           88.7%

Non-California Operations (2)
Net Premiums Written                  $    203,050    $    217,569    $    612,844    $    625,284
Net Premiums Earned                        196,780         198,012         595,343         567,326

Loss Ratio                                    75.1%           68.9%           77.7%           66.4%
Expense Ratio                                 31.4%           30.5%           30.2%           31.5%
Combined Ratio                               106.5%           99.4%          107.9%           97.9%
</TABLE>

                                            At September 30,
                                      ----------------------------
Policies-in-force (000's)                 2006            2005
- -----------------------------------   ------------    ------------
California Personal Auto                     1,140           1,096
California Commercial Auto                      21              21
Non-California Personal Auto                   352             370
California Homeowners                          258             236
Florida Homeowners                              14              16

Notes:
All ratios are calculated on GAAP basis.
(1)  Includes homeowners, auto, commercial property and other immaterial
     California business lines
(2)  Includes all states except California

<PAGE>

                  Mercury General Corporation and Subsidiaries
                 Condensed Balance Sheets and Other Information
                        (000's except per-share amounts)
                                   (unaudited)

                                             September 30,    December 31,
                                                 2006            2005
                                             -------------   -------------
Investments - available for sale
  Fixed maturities at market
   (amortized cost $2,830,593 in 2006
   and $2,593,745 in 2005)                   $   2,880,398   $   2,645,555
  Equity securities at market
   (cost $255,075 in 2006 and $225,310
   in 2005)                                        303,393         276,108
  Short-term cash investments, at cost,
   which approximates market                       289,024         321,049
      Total investments                          3,472,815       3,242,712
Net receivables                                    399,596         390,234
Deferred policy acquisition costs                  213,720         197,943
Other assets                                       223,986         245,653
  Total assets                               $   4,310,117   $   4,076,542

Losses and loss adjustment expenses          $   1,065,064   $   1,022,603
Unearned premiums                                  963,365         902,567
Other liabilities                                  445,541         399,995
Notes payable                                      141,961         143,540
Shareholders' equity                             1,694,186       1,607,837
  Total liabilities and shareholders'
   equity                                    $   4,310,117   $   4,076,542

Common stock - shares outstanding                   54,685          54,605
Book value per share                         $       30.98   $       29.44
Statutory surplus                            $ 1.5 billion   $ 1.5 billion
Portfolio duration                               3.3 years       2.9 years

SOURCE  Mercury General Corporation
    -0-                             11/06/2006
    /CONTACT:  Theodore Stalick, VP/CFO of Mercury General Corporation,
+1-323-937-1060/
    /Web site:  http://www.mercuryinsurance.com /
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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