A health insurer recently asked Pennsylvania's high court to overturn an appellate decision loosening the standard for punitive bad faith penalties in a case over a cancer insurance claim that experts say could lead to a surge in bad faith claims by policyholders if the justices find that ill intent on the insurer's part is not required.
Buoyed by a pair of friend-of-the-court briefs filed by insurance industry trade groups, Conseco Health Insurance Co. told the Pennsylvania Supreme Court in a filing last week that a state appellate court erred in ordering a new trial in a bad faith case brought by policyholder LeAnn Rancosky, who developed ovarian cancer in 2003.
Abby Sher of the Bad Faith Practice Group comments in Law360. "While it is certainly a high burden, it is consistent with Pennsylvania's standard for punitive awards," said Abby Sher. "If Pennsylvania adopts that standard, it will provide insurers with guidance as to the obligations with which they have to comply."
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