REDLINING PRACTICES FOILED

In Matter of Markowitz v. Serio, Brooklyn Borough President Marty Markowitz sought to investigate the "redlining" practices of Farmers New Century Insurance Company by using the Freedom of Information Law (FOIL).

"Redlining" in the insurance industry involves "an insurer's refusal to issue or renew ... a policy premised exclusively on the geographic location of the risk."

Markowitz wanted to know how many Brooklyn insurance policies had been issued, renewed, or cancelled and, when a FOIL request was filed, the State Insurance Department (SID) refused to release the information, reasoning that would allow competitors access to "trade secrets or records" and "would cause substantial injury to [their] competitive position [as] insurers."

After Markowitz filed suit, Gregory Serio, SID's Superintendent, claimed the refusal to release the information was "reasonable and consistent with lawful procedure," and not "arbitrary and capricious." The New York County Supreme Court disagreed and ruled in Markowitz's favor, but the Appellate Division, First Department, reversed.

On appeal, the New York Court of Appeals, again reversed and found SID was required to release the information.

While there are certain FOIL exemptions -- particularly when the release of trade secrets could cause substantial financial or competitive injury -- Serio and SID failed to show how the reports fell "squarely within a FOIL exemption" and didn't offer a "particularized and specific justification for denying access."

And even though SID contended releasing the information would allow competitors to exploit a "weakspot," our state's highest court found that argument "theoretical at best."

Will SID get foiled again?

To download a copy of the Court of Appeals' decision, please use this link: Matter of Markowitz v. Serio