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California Court of Appeal: Insurers Not Liable Under the California Insurance Frauds Prevention Act

In its recent decision, People ex rel. Ellinger v. Magill, et al., —Cal.Rptr.3d—, No. E076378, 2022 WL 1077988 (Cal. Ct. App., Mar. 18, 2022), the California Court of Appeal refused to extend liability under California’s Insurance Frauds Prevention Act (IFPA) to an insurer’s claims handling practices. Insurance Code Section 1871.7 allows a party to file a qui tam action[1] for violations of certain insurance claim related conduct described in the rule itself. Section 1871.7 also incorporates prohibited conduct from other statutes, such as California Penal Code Section 550, as permissible bases for the qui tam action. A person who violates Section 1871.7 is subject to “a civil penalty of not less than five thousand dollars ($5,000) nor more than ten

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Eleventh Circuit (Florida):  No Bad Faith for Investigating Claim

On February 15, 2022, the United States Court of Appeal for the Eleventh Circuit upheld the Southern District of Florida’s summary judgment victory for GEICO, finding that no reasonable jury could conclude that GEICO had operated in bad faith with respect to its handling of a wrongful death claim against its insured. Ellis v. GEICO Gen. Ins. Co., No. 21-12159, 2022 WL 454176 (11th Cir. Feb. 15, 2022).  This case reinforces that under Florida law, an insurer may take a reasonable time to investigate a claim, and that, absent time to investigate or a settlement demand, an insurer need not voluntarily tender policy limits.  About The Author

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Claims Handling: Questions Are the Answer

The key issue in insurance bad faith litigation is whether the claims professional reasonably handled the claim. Throughout the claims-handling process, the claims professional should constantly ask him-or-herself whether the investigation is sufficient to support a coverage determination and how someone might challenge that determination. By asking and answering those questions, the claims professional can be confident in his or her coverage determination. And to ensure that the claims professional’s analysis is not lost, his or her file should contain the evidence necessary to fully explain any such determination. About The Authors

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Georgia Supreme Court Clarifies Pre-Suit Offer Requirements

On March 6, 2017, the Georgia Supreme Court answered certified questions regarding the application of Georgia’s Pre-Suit Offer statute concluding that O.C.G.A. § 9-11-67.1, the statute dealing with the formation of settlement agreements pursuant to pre-suit offers to settle tort claims arising from the use of a motor vehicle, does not prohibit a claimant from conditioning acceptance of a pre-suit offer upon the performance of an act, such as timely or prompt payment. Grange Mutual Casualty Co. v. Woodard, 797 S.E.2d 814 (2017). In doing so, the Court clarified that the statute sets forth the minimum requirements for pre-suit offers. Beyond those required terms, the Court explained, parties are free to add additional terms. This includes presenting a pre-suit offer

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Posted in Bad Faith, Uncategorized
Avoiding Insurance Bad Faith
Cozen O’Connor represents insurance clients in jurisdictions throughout the U.S. against statutory and common law first- and third-party extracontractual claims for actual and consequential damages, penalties, punitive and exemplary damages, attorneys’ fees and costs, and coverage payments. Whether bad faith claims are addenda to a broader coverage matter or are central to the complaint, Cozen O’Connor attorneys know how to efficiently respond to extracontractual causes of action. More
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