UNFAIR TRADE PRACTICES ACT AND
By Mike Abourezk and Marialee Neighbours
Several South Dakota statutes prescribe insurance company responsibilities to insurance claimants. Some of these statutes are:
Unfair Trade Practices
The Unfair Trade Practices Act, S. D. C. L. § 58-33-67, defines unfair or deceptive insurance company practices in South Dakota. Some unfair or deceptive insurance company practices are:
In South Dakota, there is no private right of action against an insurer under the Unfair Trade Practices Act. S.D.C.L. § 58-33-69. However, courts routinely admit evidence of a state's unfair claim practices act and regulations in insurance bad faith actions. See, e.g., Ingalls v. Paul Revere Life Ins. Co., 561 N.W.2d 273(N.D. 1997)(violation of State's Prohibited Practices in Insurance Business Act may be considered as evidence of bad faith); Walston v. Monumental Life Ins. Co., 923 P.2d 456, 461 (Idaho1996) (expert witness testimony on insurance statute proper to show insurance industry standards even though no private cause of action exists under the statute); Spray, Gould & Bowers v. Associated International Ins. Co., 71 Cal. App. 4th 1260, 84 Cal. Rptr. 552 (Cal. App.1999) (court looks to insurance regulations to determine if there was a duty to speak, violation of which estops insurer from raising defense); MacFarland v. United States Fidelity & Guarantee Co., 818 F. Supp. 108, 110 (E.D. Pa. 1993) (unfair claim practices act and regulations can be considered in determining whether insurer engaged in bad faith); Certainteed Corp. v. Federal Ins. Co., 913 F. Supp. 351 (E.D. Pa. 1995) (allowed evidence of unfair claims practices act and regulations to be considered in determining whether insurer engaged in bad faith); Weiford v. State Farm Mutual Automobile Ins, Co., 831 P.2d 1264, 1269 (Ala. 1992) (where insured had common law bad faith claim no error in instructing on duties imposed by unfair claim practices act); Inland Group of Cos., Inc. v. Providence Washington Ins. Co., 985 P.2d 674, 683 ( Idaho1999)(Court upheld use of expert testimony to "utilize Idaho's Unfair Claims Settlement Practices Act to show insurance industry practices in Idaho.").
Uninsured and Underinsured Motorist Insurance
South Dakota Codified Law § 58-11-9 provides that no motor vehicle liability insurance policy may be issued in South Dakota unless uninsured motorist coverage is provided. The statute provides in pertinent part:
No policy insuring against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance, or use of a motor vehicle may be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state, ..., unless coverage is provided therein ... for bodily injury or death equal to the coverage provided by such policy for bodily injury and death, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness, or disease, including death, resulting therefrom.... (emphasis added).
South Dakota Codified Law § 58 11 9.4 specifies that no motor vehicle liability insurance policy may be issued in South Dakota unless underinsured motorist coverage is provided. S.D.C.L. § 58 11 9.4 provides in pertinent part:
No motor vehicle liability policy of insurance may be issued or delivered in this state with respect to any motor vehicle registered or principally garaged in this state,..., unless underinsured motorist coverage is provided therein at a face amount equal to the bodily injury limits of the policy. (emphasis added).
Since S.D.C.L. § 58-11-9 and S.D.C.L. § 58 11 9.4 are intended to protect motorists from the losses attributable to uninsured and underinsured drivers, an insurer's bad faith handling of these claims thwarts public policy.
In bad faith cases involving worker's compensation, there are several statutes that establish an insurance company's responsibilities to an injured worker. Some pertinent parts of these statutes are:
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