Maryland’s Contractual Conception of Insurance: The Improvident Grant of Certiorari in PICD v. State Farm

Steven M. Klepper

On January 24, 2014, the Court of Appeals of Maryland granted certiorari in People's Insurance Counsel Division v. State Farm Fire & Casualty Co. (“PICD v. State Farm”). Question one of the petition was whether the Court of Appeals should “reexamine Maryland common law on construing insurance contracts and, recognizing that such contracts are not the product of equal bargaining, hold that terms contained in an insurance policy must be strictly construed against the insurer?” This question is provocative but misguided. First, the appeal is from an administrative proceeding where the Maryland Insurance Administration (“MIA”) lacked jurisdiction to apply such principles of contract construction. Second, the record indicates that the petitioner failed to press more apt remedies for the facts of the case. On the substance, the petitioner advocates a rule that at best adds nothing to the analysis and at worst destabilizes Maryland insurance law.