Bad
Faith Insurance Law
Bad faith insurance law is the area of law relating to insurance companies who deny policyholders benefits sought through legitimate claims. There is no uniform bad faith insurance law which governs the actions of all insurance companies, nor is there an established code of conduct for insurance companies. Bad faith insurance law does, however, require that insurance companies uphold their fiduciary duty to act in good faith and fair dealings in all transactions involving their policyholders.
Good faith and fair dealing principles imply that insurers have a responsibility to act in the best interests of their policyholders above all else. This means that to act in good faith, insurance companies should search for ways to honor, rather than deny, a policyholder's claim. When an insurer fails to act in good faith, bad faith insurance law states that they are in breech of contract and may be responsible for all resulting damages.
ERISA, or the Employee Retirement Income Security Act, is a bad faith insurance law that was passed by the US government in 1974. This bad faith insurance law is a detailed and complex federal law which was established to protect the rights and interests of consumers against fraudulent insurance practices. The ERISA bad faith insurance law is applicable to some, but not all, insurance dealings. It specifically sets forth standards for the administration and management of pension plans and a variety of other employee and retirement benefit plans.
The ERISA bad faith insurance law requires that insurers discharge their duties in the interests of plan participants and beneficiaries. This bad faith insurance law states that a failure to uphold this fiduciary duty may qualify as a personal liability for the individual or group that acted in bad faith. There are a number of other standards set forth in this bad faith insurance law to protect the rights of policyholders.
When a policyholder has suffered as a result of an unjustified denial of insurance benefits, bad faith insurance law allows them a means to seek relief for their losses. This is accomplished by way of a civil lawsuit filed on behalf of the policyholder in order to seek compensation for their losses. In addition to restitution, bad faith insurance law may also allow punitive damages to be awarded in cases of bad faith involving intentional or malicious wrongdoing.
Most states have established their own bad faith insurance law provisions which detail the specific consequences for bad faith insurance dealings. The bad faith insurance laws which apply to an individual's case can vary depending on the type of violation in question, the type of insurance, the jurisdiction where the malfeasance took place, and numerous other variables. If you wish to discover whether or not your denied insurance benefits constitute a violation of bad faith insurance law, you may wish to contact a qualified and experienced attorney in your area who can evaluate your case to determine how best to protect and maximize your legal interests.
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you would like more information on the elements of bad faith, please contact us to confer with a bad faith lawyer.
