Many States and other U.S. jurisdictions have adopted verbatim or variations on the National Association of Insurance Commissioners' Model Unfair Claim Practices Act. Some jurisdictions have labelled their statutes an Unfair Claims Practices Act for that reason; others have instead chosen to call their statutes Unfair Trade Practices Acts.
Montana Courts often deliver bad faith decisions against insurance companies, and Montana is one of the jurisdictions with an "Unfair Trade Practices Act" which regulates the claims conduct of insurance companies.
In a recently filed class action lawsuit, one of the named plaintiffs is the owner of a medical clinic in Montana. The clinic did not apparently sue because of its role as a medical clinic, but rather it sued in its role as a small business which purchased health insurance coverage for its employees under health insurance plans offered through the Chamber of Commerce. The class action complaint, filed on behalf of all those similarly situated, contained allegations that "by improperly charging consumers [the defendant health insurance carrier] padded premiums that included undisclosed amounts exceeding the medical premium …." The "undisclosed amounts" were alternatively identified in the complaint as "kickbacks" to the Chamber of Commerce to promote the health plan for sale. Mark Ibsen, Inc. v. Caring for Montanans, Inc., 371 P.3d 446, ¶¶ 1, 5, at 447-48 (Mont. 2016).
The Montana Supreme Court said in essence that if the Montana UTPA allowed the lawsuit, the Court would have voted to allow the class action to proceed. However, the Court held that the UTPA did not confer a private, implied right of action against the insurance company. In a lengthy review of the statutory history including judicial interpretations of the Act, the Supreme Court refused to imply such a cause of action where the Montana Legislature had clearly not provided for one. Rather, in the eyes of the Court, the Legislature left 'regulation' of the pertinent conduct to regulators and not to Courts or to private litigants in this instance. Mark Ibsen, Inc. v. Caring for Montanans, Inc., 371 P.3d 446, ¶¶ 20-43, at 450-55 (Mont. 2016).
Please Read The Disclaimer. ©2016 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with Supplements). Express v. implied rights of action under statutes in first-party cases like this one, including the lineup of Courts which have decided these issues to date, are discussed in 2 id. §§ 9:14 - 9:15. The related issue of statutory preemption in first-party cases like this one is discussed in 2 id. § 9:16. You are invited to visit the author's website here. All rights reserved.
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