In Davidson v. American Freightways, Inc., 25 S.W.3d 94, 95 (Ky. 2000), when asked to consider whether Kentucky's Unfair Claims Settlement Practices Act and the tort of bad faith apply to persons or entities who are self-insured or uninsured, the Supreme Court of Kentucky "concluded that both the statute and the common law tort apply only to persons or entities engaged in the business of insurance."
We quote with approval from the court's reasoning:
"The gravamen of the UCSPA is that an insurance company is required to deal in good faith with a claimant, whether an insured or a third-party, with respect to a claim which the insurance company is contractually obligated to pay. Absent a contractual obligation, there simply is no bad faith cause of action, either at common law or by statute." (Id. at 100.)