Insurance Defense and Coverage
Bad Faith and Extracontractual
These statutes, most modeled on the NAIC model act, enumerate specific prohibited practices: misrepresenting policy provisions, failing to acknowledge communications promptly, failing to conduct a reasonable investigation, refusing to pay without reasonable investigation, and failing to attempt good faith settlement where liability is clear.
They are enforced primarily by state insurance regulators through market conduct examinations and administrative penalties.
Alternative Names:
UCSPA, Unfair Claims Practices Act
Why it Matters?
Even where the statute creates no private right of action, its standards define reasonableness for common law bad faith. Plaintiff counsel routinely plead the statutory violations as the framework for a bad faith claim, and the enumerated practices give a jury a concrete checklist against which to measure the carrier's file.
Frequently Confused with
Related terms
Frequently asked questions
Does violating the statute automatically create liability?
What is a civil remedy notice?
