CONDUCT VIOLATING UIPA MAY BE CONSIDERED IN STATUTORY BAD FAITH CASES (Philadelphia Federal)

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In this putative class action, plaintiff sought declaratory relief under the Unfair Insurance Practice Act (UIPA). The court observed that there is no private right of action under the UIPA, and seeking declaratory relief for violating specific UIPA provisions would amount to an impermissible private cause of action.

In a footnote, the court added:

“In D’Ambrosio [v. Pa. Nat. Mut. Cas. Ins. Co., 494 Pa. 501, 431 A.2d 966, 969 (Pa. 1981)], the Pennsylvania Supreme Court held that the UIPA is enforced by the Insurance Commissioner of Pennsylvania, and stated that was for the legislature to determine whether additional sanctions should be available. Pennsylvania later enacted 42 Pa. C.S. § 8371, which permits an insured under a policy to pursue a claim of bad faith against the insurer. See Rancosky v. Washington Nat’l Ins. Co., 642 Pa. 153, 170 A.3d 364, 371 (Pa. 2017). Conduct that violates the UIPA may be considered in determining whether an insurer acted in bad faith under this statute. Jones [v. Nationwide Property & Casualty Ins.], 995 A.2d [1233,] 1236-37 [(Pa. Super. Ct. 2010)].”

On this last point, there is a split in authority whether UIPA violations even can be used as evidence of a bad faith claim. See this post discussing the different positions courts have taken on the UIPA in connection with statutory bad faith claims.

Date of Decision: September 13, 2019

Excel Pharmacy Services, LLC v. Liberty Mutual Insurance Co., U. S. District Court Eastern District of Pennsylvania CIVIL ACTION NO. 18-4804, 2019 U.S. Dist. LEXIS 156306, 2019 WL 4393076 (E.D. Pa. Sept. 13, 2019) (Rufe, J.)

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