Md. A.G. Brown Joins Coalition to Protect Homeowners From Discriminatory Insurance Industry Practices

BALTIMORE, Maryland, Oct. 24 -- Maryland Attorney General Anthony G. Brown issued the following news release:

Maryland Attorney General Anthony G. Brown joined a coalition of 15 Attorneys General filing an amicus brief supporting the Department of Housing and Urban Development (HUD) in a legal challenge to HUD's prohibition on housing practices that may appear neutral but in reality are discriminatory under the Fair Housing Act.

The HUD regulation, known as the Disparate Impact Rule, has been formally in effect since 2013.

"Dismantling discriminatory practices in homeowners insurance, such as offering inferior policies or imposing burdensome terms and conditions in some neighborhoods but not others, is essential for fair housing," said Attorney General Brown. "Weakening the federal protections that ensure equal access to homeowners insurance will make it more difficult for states to combat systemic discrimination."

Courts have long recognized that the Fair Housing Act bars housing practices that, while not overtly discriminatory, have a disparate impact on individuals based on race, national origin, or another protected characteristic. However, a group of companies that sell property and casualty insurance sued to have HUD's Disparate Impact Rule declared invalid as it applies to homeowners insurance pricing and underwriting. The plaintiffs argued that HUD should have granted a blanket exemption to the rule when addressing potential conflicts with state-level insurance laws and regulations, instead of considering conflicts on a case-by-case basis.

In their brief, filed in the U.S. District Court for the Northern District of Illinois, the coalition argues that HUD reasonably declined to create broad exemptions for homeowners insurance in favor of an approach that is more respectful of individual states' policy and regulatory choices.

The Attorneys General refute the claim that applying the Disparate Impact Rule to the homeowner's insurance industry interferes with state-level insurance regulation, which varies from state to state. The group argues that just because regulation varies throughout the country, it does not justify exempting the whole industry - or entire categories of insurance practices - from disparate impact liability on a nationwide basis.

In filing the brief, Attorney General Brown joins the Attorneys General of California, Colorado, Delaware, the District of Columbia, Hawaii, Illinois, Massachusetts, Minnesota, Nevada, New Jersey, New York, North Carolina, Oregon, and Washington.

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View amicus brief here: https://www.marylandattorneygeneral.gov/news%20documents/101823_HUD.pdf

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Original text here: https://www.marylandattorneygeneral.gov/press/2023/102323.pdf