A United States District judge put a temporary restraining order on hold Monday as both sides of an insurance discrimination case work on a resolution.

Judge Julie Rebecca Rubin ruled that Erie Insurance and the Maryland Insurance Administration have up to 60 days to come to a resolution following the administration’s finding in May that the Pennsylvania-based insurance company used discriminatory practices against Black Baltimore-area brokers, and thus its residents.

According to Erie Insurance’s subsequent lawsuit, filed Thursday in U.S. District Court in Baltimore, the Maryland Insurance Administration rushed and did not properly conduct an investigation of complaints from Black brokers. Erie Insurance also claims that the administration “improperly, and publicly, revealed attorney-client privileged and work product protected communications between Erie management and its attorneys.”

When reached for comment Monday, Erie Insurance said they were precluded from discussing their lawsuit.

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“Under a consent order issued this afternoon, we are not able to comment further on this matter,” said Erie Insurance spokesman Matthew Cummings.

Governor Wes Moore’s administration did not immediately provide a comment about the judge’s most recent order.

Following the company’s lawsuit against the state, a spokesman for the governor denounced the insurance company.

“This is a prime example of the systemic racism that Governor Moore has committed to root out of the State of Maryland. This kind of behavior targeting minorities in communities throughout Maryland will not be tolerated,” said Moore spokesman Carter Elliott.

Minority-owned businesses are an integral part of Maryland’s economy, and the governor has shown a strong commitment to ensuring minority-owned businesses thrive in Maryland, according to Elliott, who touted Moore signing an executive order to “strengthen participation, compliance, and accountability for Maryland’s Minority Business Enterprise (MBE) program.”

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Elliott added: “Governor Moore will continue to work to create a Maryland that leaves no one behind by ensuring that all of Maryland’s communities are uplifted.”

In May, The Maryland Insurance Administration wrote an opinion that said that actions by Erie Insurance were “arbitrary and capricious and unfairly discriminatory.” The administration added that Erie 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.”

Four Baltimore-area insurance brokerage firms filed complaints with the administration in 2021. They include Baltimore Insurance Network LLC of Bowie, Welsch Insurance Group of Baltimore, Ross Insurance Agency of Windsor Mill, and Burley Insurance, which is based in Baltimore. The complaints by the Baltimore-area brokers goes back to early 2017. But the discriminatory practices are suspected to go back years before that, the state said.

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, because they said it would indicate that they would live paycheck-to-paycheck and had not set up automatic payments, according to Cary Hansel, the lawyer for one of the complainants, Baltimore Insurance Network, a Black-owned small business. These practices were not applied to other potential clients, he added.

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.”

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Hansel and his clients were not deterred by Erie Insurance’s recent lawsuit.

“Rather than reckon with what the state has found to be Erie’s unlawful discrimination, the company is trying to hide the evidence against it. This effort will fail. Our system is designed to operate in the open and to stamp out racism. We look forward to success on both fronts,” Hansel said.

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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