Riley v. The Travelers Home and Marine Insurance Co.
Connecticut General Statutes §38a-323b, which requires the inclusion of certain information and language in an insurance company's denial of coverage, does not provide a private cause of action, if the information and language is excluded. On Feb. 27, 2009, the plaintiff's property in Pomfret Center allegedly suffered damage in a fire, and the plaintiff, C. Andrew Riley, requested benefits from the defendant insurance company, The Travelers Home and Marine Insurance Co. The defendant investigated, concluded that the plaintiff allegedly was responsible for intentionally causing the fire and denied the plaintiff's claim. The plaintiff sued, alleging breach of contract and that the defendant insurance company did not comply with C.G.S. §38a-323b, which requires the inclusion of certain information and language in a denial of coverage. The defendant insurance company moved to strike the second count and argued that C.G.S. §38a-323b does not provide a private cause of action. The statute provides, "Each insurer, or designee of an insurer, that denies a claim under a personal risk insurance policy issued in this state shall provide the insured with written notice of the denial. The written notice shall include the following statement, which shall appear in the final paragraph of the notice in not less than twelve point type: `If you do not agree with this decision, you may contact the Division of Consumer Affairs within the Insurance Department.' " The court found that the statute does not create a private cause of action against an insurer who allegedly fails to comply. If the legislature had intended to include a private cause of action for noncompliance, it had that option. "There is nothing in §38a-323b," wrote the court, "that even hints at the creation of a private cause of action, or suggests that noncompliance with the requirements of the statute renders a notice of denial ineffective." The court observed that the legislative remedy is to fine an insurance company that fails to comply. The court granted the insurance company's motion to strike the plaintiff's allegation that the insurance company violated C.G.S. §38a-323b.