Private Right of Action

  • A regulator pointed out that a provision for a private cause of action is a major departure from NAIC policy, and after extensive discussion, the working group decided to take out that provision. 

1993 Proc. 4th Quarter - (p653)


  • After achieving consensus on the set of guiding principles, the working group drafted a model act to provide states with the authority to adopt provisions.
  • One regulator asked if the act would become part of the unfair trade practices act and said he thought it would be important to include a provision for a private cause of action.
  • This would address one of the concerns noted in the position paper, that of insufficient penalties for violation.

1993 Proc. 4th Quarter - (p654)

LIFE INSURANCE ILLUSTRATIONS MODEL REGULATION - Proceeding Citations

  • Walker v LSW
    • Video - Appeals Court
  • 3 As explained in further detail below, there exists no private right of action for violations under the Unfair Settlement Practice Act. See Moradi-Shalal v. Fireman’s Fund. Ins. Co., 46 Cal. 3d 287, 313 (1988).

2019 - 18-943 - Openiano v. Hartford Life and Annuity Insurance Company et al

1993-4, NAIC Proceedings - (p654)

  • Don Koch (Alaska) asked if the act would be part of the Unfair Trade Practices Act.
  • Mr. Wright asked if there was a private cause of action in the Unfair Trade Practices Act.
  • Carolyn Johnson (NAIC/SSO) responded that the Unfair Trade Practices Act specifically said it did not imply a private cause of action.
  • Mr. Koch said he thought it would be appropriate to include a section in the model to provide for a private cause of action.
    • He suggested either adding language to that effect or inserting a drafting note.
  • The working group decided to add a section authorizing a private cause of action.
    • This would address one of the problems noted in the white paper about insufficient penalties for violations.
  • Mr. Koch suggested a provision such as currently being considered in the draft Title Agents Model Act being prepared by another working group.
    • Tony Higgins (N.C.) asked if this provision would limit regulatory action in any way and the group agreed that it did not.

1993-4, NAIC Proceedings - (p657)

  • The working group reconvened in closed session on Nov. 16, 1993, at 9 a.m.
  • The working group decided to revise the language of Section 3 to delete any reference to unfair and deceptive acts and practices.

1993-4, NAIC Proceedings 

  • The group considered whether the penalties in Section 4 should be combined with the private cause of action in Section 5.
  • The working group decided they should remain separate.
  • Mr. Nepple asked if intent was an element of the violation to use the remedies of Section 5, and the group agreed it was not.
  • Mr. Nepple pointed out that consumers already could sue under a theory of intentional misrepresentation, but this alternative would not include intent.
    • Mr. Wright agreed this was a viable approach.
  • The vast majority of the Department of Insurance's cases are brought in an administrative as opposed to judicial forum.
  • The Department's administrative authority to obtain remedies for individual consumers is more limited than that of a plaintiff in a UCL lawsuit with respect to monetary and injunctive relief.
  • Further, the existence of private plaintiffs' lawsuits helps forward the course of the law more effectively than would be the case if the only adjudications were those proceedings, largely administrative, initiated by the Commissioner.

2015 - LC - Brief of the State of California and the California Insurance  Commissioner as Amicus Curiae in Support of Plaintiffs, Walker vs Life Insurance Company of the Southwest. Case: 15-55809, 12/16/2015, ID: 9795445, DktEntry: 24, p27-28