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Kentucky Farm Bureau Mutual Insurance Company v. Rodgers9/13/2002
ve damages awarded and the civil penalties authorized or imposed in similar cases. Farm Bureau argues that Kentucky statutory penalties for misconduct of the type at issue here do not authorize the award returned by the jury in this case. It also contends that previous jury verdicts failed to provide it with adequate warning that it might be subjected to a million-dollar penalty.
Farm Bureau is aware that Kentucky has a great interest in its claims-handling practices. Kentucky has enacted the Unfair Claims Settlement Practices Act, it has designated a Commissioner of Insurance to enforce the Act's provisions, and it has adopted numerous administrative regulations regarding unfair claims settlement practices. The Kentucky Supreme Court has recognized a private cause of action for damages arising from a violation of these provisions. State Farm Mut. Auto. Ins. Co. v. Reeder, Ky., 763 S.W.2d 116 (1988).
Farm Bureau is keenly aware that it risks substantial civil penalties and fines when it engages in unfair claims settlement practices. Its license to sell insurance may even be jeopardized by suspension or revocation for engaging in this sort of misconduct. It is also aware that Kentucky has not enacted statutory limits on the imposition of punitive damages and that its courts have shown no particular reluctance or squeamishness in upholding substantial punitive damage awards where the evidence justified them. See Sandhill, supra. In light of these factors, Farm Bureau's argument that it lacked adequate notice of the potentially severe consequences of its misconduct is simply lacking in credibility. We hold that there was more than sufficient evidence to support the jury's punitive damage award under the final criterion of the BMW factors.
The judgment of the Lincoln Circuit Court is affirmed.
ALL CONCUR.
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