There is a conflict in the case law as to whether insurance companies can be sued for insurer bad faith conduct under Unfair Trade Practices Acts. The source of the conflict may lie in the language of the Consumer Protection Laws themselves. For example, the Court held in Booker v. USAA Gen. Indem. Co., No. 22-1829, 2022 WL 2209287, at *2-*3 (E.D. Pa. June 21, 2022):
Count III of Plaintiff's Complaint asserts a claim under Pennsylvania's Unfair Trade Practices and Consumer Protection Law (“UTPCPL”), 73 P.S. §§ 201–1 et seq., arising from USAA's “conduct and handling” of his UM claim. This claim will be dismissed with prejudice because the UTPCPL does not extend to claims arising out of the handling of insurance claims.
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The UTPCPL applies to conduct surrounding the insurer's conduct in forming the contract.
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The allegations here all relate to USAA's handling of an insurance claim, with no allegations as to misconduct in the sale of the policy. Count III of the Complaint will therefore be dismissed with prejudice.
This conflict is broken down for use in litigated cases and in the prevention of insurer bad faith, in 2 DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH § 9:14, (West Publishing Company 3d Edition, 2023 Supplements in process).
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