MARVIN MANDEL, Governor                            2593

decision rendered in the consolidated cases captioned
Insurance Commissioner of Maryland, et al. v. Allstate
Insurance Company and Insurance Commissioner of Maryland
v. Aetna Casualty and Surety Company, 268 Md. 428 (March
28, 1973), while acknowledging that control of
underwriting by insurance companies is "subject to
modification by a valid statutory provision" (268 Md. at
441) , has interpreted the provisions of Section 234A (a)
of Article 48A of the Annotated Code of Maryland (1972
Replacement Volume) which provide that:

"No insurer, agent or broker shall cancel or refuse
to underwrite or renew a particular risk or class of
risk for any reason based in whole or in part upon
race, color, creed or sex of an applicant or
policyholder or for any arbitrary, capricious, or
unfairly discriminatory reason."

as follows:

"It is clear...that the principal thrust of this
legislation was directed toward any action of an
insurer in failing to underwrite or renew a
particular risk or class of risk for any reason
based in whole or in part upon race, color, creed or
sex of an applicant or policyholder (or) for any
arbitrary, capricious or unfairly discriminatory
reason like those specifically mentioned, including,
but not restricted to, religion, national origin,
place of residency or other similar irrelevant
considerations. In short, the General Assembly
intended to broaden the scope of 'arbitrary,
capricious or unfairly discriminatory reason,' but
within the frame of reference of the specifically
mentioned 'reasons'." 268 Md. at 442 (apparent
omission added);

WHEREAS, The General Assembly of Maryland has
determined that the general welfare of the People of
Maryland in the vital area of insurance requires that all
underwriting decisions of insurers and insurance agents
and brokers, with regard to both eligibility and
acceptability of applicants for insurance and insureds,
be made solely on the basis of a reasonable application
to relevant facts of underwriting principles, standards
and rules that can be demonstrated objectively to measure
the probability of a direct and substantial adverse
effect upon losses or expenses of the insurer in light of
the approved rating plan or plans of the insurer then in
effect, and that the general welfare of the People of
Maryland in the vital area of insurance is insufficiently
assured and inadequately promoted merely upon a showing
by insurers and insurance agents and brokers that their
underwriting decisions are made without reasons based in