By: AgencyEquity.com
A Maryland independent insurance agency represented a carrier group for 22 years. After the carrier terminated its contract with the agency, the owner sued, alleging persistent racial discrimination.
An African-American woman owned the agency. The carrier appointed the agency in 1998. The first African-American producer for the carrier in Maryland, she eventually built a book of business consisting of 2,600 clients and close to $4 million in premium. Despite that success, she believed the carrier treated her differently from her peers because of her race. She claimed that:
- Starting in 2002, the carrier rerouted to her agency leads with names that sounded African American or Hispanic and diverted leads with names that sounded European American to other agencies.
- Between 2003 and 2021, the carrier reduced her commissions without a legitimate reason.
- The carrier imposed requirements on her agency that it did not impose on non-African-American agencies, such as background checks of clients and site visits.
The carrier terminated the agency’s contract in 2020. In response, she filed a complaint with the state insurance department. While her complaint was pending, she followed it with a lawsuit against the carrier and one of its employees alleging violations of the federal Civil Rights Act; intentional interference in her business; and that the carrier was responsible for its employee’s actions. The court dismissed those claims as premature because the insurance regulator had not yet reached a conclusion on the complaint.
By the summer of 2024, the insurance department had determined that the carrier had terminated her contract based on its use of unlawful loss ratio metrics that targeted agencies in urban areas with large minority populations. She then re-filed the lawsuit with the same allegations. The carrier asked the court to dismiss the suit. It appears from the judge’s opinion that the department’s investigation was still open when he rendered the decision.
In late March 2025, that decision was to dismiss the suit but leave the door open for her to amend the Civil Rights Act complaint. On the claims of interference with business and responsibility for the acts of an employee, the court deferred to the authority of the Maryland Insurance Administration, saying that the administration had “primary jurisdiction” over the dispute and the resolution must come from them.
On the civil rights claim, the judge said the allegations were vague. He wrote that the claim consisted solely of the “bare allegation” that the carrier discriminated against the agency based on her race and required her to jump through hoops that other agencies did not. He called the allegation “devoid of factual detail” as to how the carrier interfered with her business. Further, he found that the complaint against the employee did not “allege that he intentionally or personally participated in the alleged discrimination.”
Under the law, he gave the agency fourteen days to file an amended complaint providing more detail. The court’s website does not indicate whether the agency met that deadline.
Any individual or business choosing to sue another for violation of civil rights laws must have significant evidence supporting that suit. This agency appears to have looked at a pattern of behavior and concluded that racial discrimination was the only explanation. Supporting a serious accusation like that requires more than a conclusion. It requires convincing evidence. The agency did not appear to have that. The judge gave them a chance to produce it. Until then, by all appearances this agency made an unfair and unsupported allegation against this carrier.
Carriers can and do treat some agencies in ways that appear unfair. Cases like this one undermine the efforts of agencies that have actually been wronged.
