Erie Insurance Co. sued Maryland insurance regulators in federal court Thursday, accusing them of improperly filing four “determination letters” in response to complaints accusing the insurer of racial and geographic discrimination.
In January 2021 and December 2021, four former and current Erie agencies filed administrative complaints with the Maryland Insurance Administration, accusing the commercial and personal insurer of discrimination, according to the lawsuit filed in U.S. District Court in Baltimore in Erie Insurance Exchange et al. v. Maryland Insurance Administration; Kathleen A. Birrane Insurance Commissioner.
The regulator informed the Erie, Pennsylvania-based insurer that it was exercising its statutory authority to open two separate administrative investigations into the allegations, the lawsuit said.
After what Erie described as limited communication from the regulator, in May 2023 the administration̵7;s P&C division and the commissioner surprised Erie by issuing four public decision letters without completing a licensing investigation it had previously determined was necessary, the lawsuit said.
The letters said the administration concluded that Erie was terminating its agency contracts because they did not meet “illegally imposed” loss ratio requirements, and that the insurer had adopted loss ratio metrics “intended to target agencies writing business in urban areas and to reduce volume of business written in these areas.”
Erie said the letters “contain ‘findings’ based on non-existent Erie ‘failures’ to provide certain information to MIA” that were “caused solely and exclusively by MIA’s sudden abandonment of its oft-repeated intention” to complete the licensing investigation.
Among other things, Erie claimed that the letter disclosed confidential business information.
The insurer said the insurance administration and commissioner rushed to publish the letters, based on an incomplete investigation, because “the companies that had filed complaints of administrative discrimination against Erie grew impatient waiting for the administration to complete the ‘thorough’ year-long investigation that MIA had determined that it was required for the complex issues presented by the administration’s complaint.”
Erie is seeking a temporary restraining order and preliminary injunction preventing further dissemination of its “confidential, privileged and proprietary information” in the decision letters, and a permanent mandatory injunction directing the administration and the commissioner to withdraw the decision letters and a declaration that the letters are illegal.
Erie did not respond to a request for further comment, while an administration spokesman said in a statement that he could not comment because the matter is in litigation.