Section 38a-816(6) of the Connecticut General Statutes[1] is a part of the Connecticut Unfair Insurance Practices Act and requires proof of a general business practice in order to establish a statutory violation. It has been held that proof of a general business practice is dependent on the facts of the case at bar:
Rather, the appropriate consideration is whether the plaintiff has made facially plausible factual allegations that, in the circumstances of the particular case, the defendant has engaged in the alleged wrongful acts enough to suggest it has a general business practice of doing so. [Citations omitted.] Relevant factors may include: the degree of similarity between the alleged unfair practices in other instances and the practice allegedly harming the plaintiff; the degree of similarity between the insurance policy held by the plaintiff and the policies held by other alleged victims of the defendant’s practices; the degree of similarity between
claims made under the plaintiff’s policy and those made by other alleged victims under their respective policies; and the degree to which the defendant is related to other entities engaging in similar practices.
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It is important to note that there is no “magic number” of other instances that a plaintiff must allege to survive a motion to dismiss on an unfair settlement practices claim under CUIPA [the Connecticut Unfair Insurance Practices Act] through CUTPA’s [the Connecticut Unfair Trade Practices Act's] enforcement provision; rather, the allegations must be considered in the context and circumstances presented by the entire complaint.[2]
Statutory bases of liability in settlement are discussed in § 3:28 (third-party bad faith claims and cases) and § 9:14 (first-party bad faith claims and cases), in DENNIS J. WALL, LITIGATION AND PREVENTION OF INSURER BAD FAITH (West Publishing Co., 2024 Supplements in process).
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[1] Conn. Gen. Stat. § 38a-816(6), which is titled Unfair claim settlement practices.
[2] Belz v. Peerless Ins. Co., 46 F. Supp. 3d 157, 166-67 (D. Conn. 2014). Accord, Thomas v. Vigilant Ins. Co., 594 F. Supp. 3d 499, 512 (D. Conn. 2022).
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