Surety Law Update Spring 2017
Recently, the Washington Supreme Court narrowly interpreted the Insurance Fair Conduct Act (“IFCA”), limiting the scope of conduct that constitutes a violation under the act. In Isidoro Perez-Crisantos v. State Farm Fire & Casualty Company, the Court determined whether a violation of the insurance regulations under the Washington Administrative Code (“WAC”) constituted a violation of IFCA. 187 Wn.2d 669 (Feb. 2, 2017). Since the enactment of IFCA, claimants have asserted that a violation the WAC provisions, even a merely technical or procedural violation, was a violation of IFCA and subjected insurers and sureties to the increased penalties under the Act, including treble damages and the claimant’s reasonable attorneys’ fees. The Court disagreed and held that a cause of action under IFCA could not be predicated solely on a violation of the WAC regulations. Instead, a cause of action under IFCA will only exist if there was an “unreasonabl[e] deni[al] of a claim for coverage or payment of benefits.”