States deal with nonfederal preclusion as well as preemption issues. Here, the question was whether state insurance regulation precluded a cause of action uncle general unfair competition/ false advertising law. The appellate court, rejecting another appellate ruling, said no. Conduct that violates only the insurance code, which is not enforceable via a private cause of action, can’t support an unfair competition claim. But false advertising is actionable even when insurance-related. This is very similar to the working compromise between the Lanham Act and the FDCA, especially is you take into account the court’s dicta that conduct that violates both laws, UCL and specific provisions of the insurance code, is actionable.
Fundamentally, given that insurance is not excluded from UCL coverage, “[t]o construe the Unfair Insurance Practices Act as immunizing insurers from the consequences of misconduct that other business must suffer would simply make no sense.” The court cautioned that the plaintiff could not recover merely by showing unreasonable handling of her claim. She’d need to show that the insurer falsely advertised to the public “that it operated honestly and equitably in settling claims and that it in fact had a policy or regular practice of ‘lowballing,’ delaying, or taking unfair advantage so that its advertising and/or representations were in fact likely to mislead the public.”