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Connecticut Supreme Court Resolves A Long Standing Split Regarding The Interplay Of Cuipa And Cutpa

Blogs, Insurance Coverage

The Connecticut Supreme Court recently resolved two unresolved questions regarding the interplay between the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110 et seq. (“CUTPA”) and the Connecticut Unfair Insurance Practices Act, § 38a-815 et seq. (“CUIPA”). State v. Acordia, Inc., 310 Conn. 1 (2013). Specifically: (1) whether an alleged unfair insurance practice which is not enumerated in CUIPA (such as the violation of an insurer’s common law fiduciary duty) can provide a foundation for a CUIPA violation; and (2) whether conduct by an insurance company or insurance broker, related to the business of providing insurance, which does not constitute a violation of CUIPA can support a viable claim under CUTPA. The Court answered both questions in the negative.

As to the first question, the Court reasoned that the legislative history of CUIPA demonstrates that the legislature intended to occupy the field of defining unfair insurance practices, thereby precluding courts from incorporating common-law principles as a basis for finding an unfair insurance practice. As to the latter, the Court explained that the legislative intent underlying CUIPA and its previous decisions of Mead v. Burns, 199 Conn. 651 (1986) and Lees v. Middlesex Ins. Co., 129 Conn. 42 (1994) supports its determination that a CUTPA claim based on insurance-related conduct cannot be raised independently of a CUIPA claim. The Court reasoned that the legislative determinations as to unfair insurance practices embodied in CUIPA are the exclusive and comprehensive source of public policy in this area, and therefore, unless an insurance-related practice violates CUIPA or some other statute regulating a specific type of insurance-related conduct, it cannot be found to violate any public policy and cannot be found to violate CUTPA.

A copy of the full decision can be found here.