As both parties acknowledge, any duty of good faith on the part of IGP would necessarily arise, if at all, from the common law duty of good faith and fair dealing that is inherent in its policy with Hartford. See generally Birth Ctr. v. St. Paul. Cos., Inc., 787 A.2d 376, 385 (Pa. 2001); Dercoli v. Pa. Nat’l. Mut. Ins. Co., 554 A.2d 906, 906-09 (Pa. 1989); Gray v. Nationwide Mut. Ins. Co., 223 A.2d 8, 11-12 (Pa. 1966). As was previously discussed in connection with TAC Count I, HSB was not in privity with IGP relative to the underlying Policy and possesses no rights under the Policy.
Section 8371, enacted in 1990, created a statutory right of action for insurer bad faith and authorized recovery of punitive damages. While it is well-settled that common law bad faith claims (which permit recovery of compensatory damages) are assignable under Pennsylvania law, Gray v. Nationwide Mut. Ins. Co., 223 A.2d 8 (Pa. 1966), § 8371 is silent on the assignability of bad faith claims. Additionally, the Pennsylvania District Courts in the 3rd Circuit split on whether bad faith claims under § 8371 were assignable.