Maryland Regulator OKs Mold Exclusion

By Michael Ha

NU Online News Service, July 8, 3:59 p.m. EDT?Maryland's decision to rescind an earlier ruling by the previousinsurance commissioner and allow insurers to exclude mold coveragewas applauded by an insurance trade association.

"By allowing insurers to offer a variety of coverage at a rangeof prices, consumers will be allowed to choose the coverage theyneed at a price they can afford," said Neil Malady, manager at theDowners Grove, Ill.-based Alliance of American Insurers. "TheAlliance welcomes the insurance administration's new, more flexiblestance on mold coverage."

The decision was announced late last month by the state's newinsurance Commissioner Alfred W. Redmer Jr., which rescinds anearlier, March ruling by Mr. Redmer's predecessor StevenLarsen.

Mr. Larsen, a Democrat who was appointed to be Maryland's topinsurance regulator six years ago by a fellow Democrat, Gov. ParrisGlendening, stepped down from his post after his term expired onMay 31, said Debbie Rosen McKerrow, spokesperson for the state'sinsurance department. Mr. Redmer, a Republican, was appointed inhis place June 1 by a new Republican governor, Robert L. EhrlichJr., who was sworn into office this past January.

On March 18, while still in office, Mr. Larsen ruled thatinsurance companies could not deny mold coverage, with dollarlimits on payouts to $15,000 for removal and $50,000 for liability.Under the new ruling by Commissioner Redmer, however, individualinsurers get to decide whether to offer such mold coverage.

The new order now allows insurance companies to exclude suchcoverage. Additionally, new filings will be processed on anexpedited basis and filing fees will be waived for 60 days afterJune 27. And filings currently under review may be modified withoutthe need to submit new filings.

"Commissioner Redmer feels very strongly about enhancingcompetition in Maryland," said Ms. McKerrow. "In order for there tobe a competitive market, some insurers may decide to offer coverageand some may decide to exclude it, while others may offer limitedcoverage. And Commissioner Redmer feels that this would stimulatecompetition. His point is to allow companies to make thesedecisions for themselves," she said.

Ms. McKerrow also acknowledged that mold-related litigation hasnot been "a huge problem in Maryland, as compared to states likeTexas." She noted that her department has received "a handful ofcomplaints" from consumers. "But it's not like the situation inother states that we read about. Maryland is not there," shesaid.