Federal judge dismisses Erie Insurance lawsuit against Maryland regulators

Case involves allegations of discriminatory practices

Federal judge dismisses Erie Insurance lawsuit against Maryland regulators

Insurance News

By Mika Pangilinan

A federal judge has dismissed a lawsuit filed by Erie Insurance against Maryland regulators over allegations of discriminatory practices.

Judge Julie R. Rubin issued the order following a proceeding held in open court earlier this week, the Baltimore Sun reported. 

The lawsuit filed in June claimed that state authorities acted illegally in determining that Erie engaged in insurance “redlining” primarily in Black neighborhoods within Baltimore.

According to Erie, Maryland Insurance Administration (MIA) conducted an expedited investigation of complaints made by insurance brokers and subsequently released findings that unlawfully disclosed confidential business information.

The rulings on these brokers’ complaints resulted in the public disclosure of confidential, attorney-client-privileged, or work-product-protected information, Erie alleged.

Three brokerage firms lodged separate complaints against Erie in January 2021. A fourth brokerage filed a similar complaint in December 2021.

When investigating these complaints, MIA had found that Erie unlawfully canceled or rejected business from brokers based on race or for other discriminatory or arbitrary reasons.

The agency additionally determined that the insurer unlawfully altered or canceled agreements for qualified applicants based on an “adverse loss ratio.”

“The loss ratio metrics that Erie adopted were designed to target agencies writing business in urban areas with large minority populations and to reduce the volume of business being written in those areas,” MIA’s ruling stated.

In response, Erie had sought a temporary restraining order to prevent the release of MIA’s determination letters and asked the court to declare these letters unlawful. It also requested a trial by jury.

Judge Rubin, however, ruled on Monday that no hearing would be necessary and denied the restraining order request. The matter was instead directed to go through a state administrative proceeding.

Erie spokesperson Matthew M. Cummings did not respond to the Baltimore Sun’s request for comment. He did speak with the paper in June, stating that the company finds discrimination of any kind to be “abhorrent and inconsistent with the values that have guided our business for nearly 100 years.”

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