On June 3, 2005, the Superior Court of California (the "Court") held a hearing on the Company's Motion for Reconsideration in Robert Krumme, On Behalf Of The General Public vs. Mercury Insurance Company, Mercury Casualty Company, and California Automobile Insurance Company, in which the Company requested that the Court refrain from issuing a modified injunction in the case until it reconsiders its decision to require the Company to accept business from any California-licensed broker. At the hearing, the Court denied the Company's motion and reaffirmed its ruling requiring the Company to accept applications for insurance from any California-licensed broker. However, the Court agreed to allow the Company 150 days to comply with this requirement. The Court also acknowledged that the Company may request a hearing one year following its implementation of the requirement to evaluate eliminating this requirement and vacating the modified injunction. The Court's ruling regarding accepting applications from any California-licensed broker and the other three requirements imposed by the Court, including compensation to be paid to brokers, the elimination of the use of the Company's broker instruction manual and the dissemination of written guidelines to its field personnel that specifically identify the standards of broker performance, will be formalized in a modified injunction that will be prepared by the Company in consultation with plaintiff's counsel. The Company cannot estimate, at this time, the potential impact on the Company's operations of complying with the modified injunction that is finally issued by the Court.