A federal judge has thrown out a lawsuit that Erie Insurance brought against a state agency over a finding that the Pennsylvania company had used discriminatory practices against Black brokers in the Baltimore area.

The company had challenged the Maryland Insurance Administration’s findings against Erie Insurance and sought a a temporary restraining order to block their release.

U.S. District Judge Julie Rebecca Rubin rejected the request for a temporary restraining order and dismissed the lawsuit without prejudice. “The parties’ submissions have been reviewed and no hearing is necessary,” the judge wrote in a one-page order.

The ruling means that the Erie, Pennsylvania-based insurance company will have to fight the claims in a state administrative proceeding.

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Rubin had previously ruled that Erie Insurance and the agency had up to 60 days to come to a resolution following the agency’s finding in May that the insurance company used practices that were “arbitrary and capricious and unfairly discriminatory.” The agency found that Erie had violated Maryland law, and that its business practices were “designed to reduce business, and did reduce business, in dense urban areas with high minority populations.”

Erie Insurance spokesman Matthew Cummings said the company had no comment on the judge’s decision.

The company had previously stated through a spokesman that it “strongly disagreed” with the agency’s decision.

“We are confident that the business goals and service expectations we set for our agents are appropriate and reasonable and that our underwriting practices comply with applicable state insurance laws and regulations,” company spokesman John Simon said in June.

Governor Wes Moore’s administration did not immediately comment on the ruling. A spokesperson for the governor had previously criticized the company, stating, “This kind of behavior targeting minorities in communities throughout Maryland will not be tolerated.”

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The judge’s order comes after four Baltimore-area insurance brokerage firms — Baltimore Insurance Network LLC of Bowie, Welsch Insurance Group of Baltimore, Ross Insurance Agency of Windsor Mill, and Baltimore-based Burley Insurance — filed complaints with the agency in 2021.

Erie Insurance required criminal background searches of potential clients, avoided insuring people with “city-sounding names,” and rejected people who made repeated calls to the agency — they believed it would indicate that they lived paycheck-to-paycheck and had not set up automatic payments, according to Cary Hansel, a lawyer for the Baltimore Insurance Network. These practices were not applied to other potential clients, he contended.

According to the state’s opinion: “Separate from the administrative complaint review and determination process, the Insurance Administration has undertaken a market conduct examination of Erie. To the extent that the actions taken by Erie described herein are part of a larger pattern of conduct and are the subject of the aforementioned market conduct examination, additional findings and violations related to such actions under the statutes referenced herein and other statutes may be found and Erie may be subject to additional findings, orders and penalties.”

Erie Insurance filed a subsequent lawsuit in June alleging that the Maryland Insurance Administration rushed and did not properly conduct an investigation of complaints from Black brokers. Erie Insurance also claimed that the agency “improperly, and publicly, revealed attorney-client-privileged and work-product-protected communications between Erie management and its attorneys.”

johnj.williams@thebaltimorebanner.com

John-John Williams IV is a diversity, equity and inclusion reporter at The Baltimore Banner. A native of Syracuse, N.Y. and a graduate of Howard University, he has lived in Baltimore for the past 17 years. 

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