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Recently, the Supreme Court of Pennsylvania determined that proof of an insurer’s self-interest or ill-will is not necessary in a claim of bad faith under the Pennsylvania bad faith statute. The case is Rancosky v. Wash. Nat’l Ins. Co., 2017 Pa. LEXIS 2286 (Sept. 28. 2017).

In 1992 the appellee, Leanne Rancosky (Rancosky) bought a cancer insurance policy to supplement her employer based health insurance. The cancer policy was issued by Conseco Health Insurance Company (Conseco), the appellate. In payment for the additional policy, the appellee’s employer USPS, automatically deducted bi-weekly payments of $22.00 from her regular paycheck. The policy had a waiver-of-premium provision, which excused premium payments in the event that the appellee became disabled due to cancer. Soon after, Rancosky was admitted to the hospital for abdominal pain and was subsequently diagnosed with ovarian cancer. She underwent treatment, and although she did not return to her job after being admitted to the hospital, she remained on payroll at USPS for several months because she had accrued sick and vacation days. Because she remained on the payroll, the premiums were deducted from her paychecks until June 2003 when she went on disability retirement. Rancosky’s physician accidentally put that her date of disability began on April 21, 2003 instead of February 4, 2003. Final payment came through in June of 2003. Conseco did not notice that Rancosky had failed to continue payment until 2005 when they deemed her policy to have lapsed. Notwithstanding this claim, Conseco paid for cancer related treatment for Rancosky’s recurring cancer in 2004 and 2005.

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