Regulators Uphold Allstate’s Coastal Move

BERLIN – Maryland insurance regulators this week announced Allstate had not violated any laws when it decided last year not to write any new homeowner policies in coastal areas of the state including Ocean City and parts of Worcester County, but a bill introduced in the General Assembly last week could help rectify the situation.

Maryland Insurance Commissioner Ralph S. Tyler on Monday announced Allstate was within its rights under the letter of existing state law with its decision to refuse to accept new homeowners’ policies in certain coastal areas of the state.

A bill introduced in the Maryland General Assembly last year would have forced Allstate and other carriers to rescind their new policy in the coastal areas of the state, but the legislation died as the session ended. Essentially, the failed bill said if Allstate and the other big insurance carriers wanted to continue to do business in Maryland, it would have to do business in all of Maryland.

Borne out of that failed bill was a task force to examine the validity of the no-new-policy in the coastal areas and, after months of careful review and study, the task force, which included Tyler, ruled Allstate was not breaking any existing state laws with its new policy.

“While the result here may be disappointing to some, the Maryland Insurance Administration is charged with enforcing the law as it is written, not as we might wish it to be,” said Tyler. “The Maryland General Assembly may well consider this subject worthy of review.”

With that said, the General Assembly has taken the subject under review and to that end, three state lawmakers, including Delegate Jim Mathias (D-38B), introduced a bill in the House this week that would address the issue. Mathias, along with two other delegates, introduced the so-called Omnibus Coastal Property Insurance Reform Act.

“We’re trying to make sure we have affordable and available insurance in the coastal areas of Maryland,” said Mathias this week. “That’s what we’re attempting to do with this. I understand the insurance companies are vulnerable, but we have to make sure our homeowners aren’t vulnerable as well.”

House Bill 1353 would help accomplish those goals by, among other things, requiring insurers to commit to a plan and give state insurance commissioners time to review and accept the plan; creating underwriting standards; adopting maps with premium ratings for certain geographical areas; and setting maximum parameters for premiums based on the value of the policies.

The bill would also set a timetable for liability coverage based on when the National Weather Service or National Hurricane Center issues a hurricane or storm warning and when the warning ends, and would offer discounts if the insured uses storm shutters or other protective measures.