OPINION
GILMAN, Circuit Judge.Sheila Kay Cobb King brought this suit against Liberty Mutual Insurance Company, alleging violations of the Kentucky Unfair Claims Settlement Practices Act (KUCSPA) and a common law claim of bad faith. The district court granted summary judgment to Liberty Mutual on the ground that King had not offered evidence of conscious wrongdoing or recklessness by the company. For the reasons set forth below, we REVERSE the judgment of the district court and REMAND the case for further proceedings consistent with this opinion
I. BACKGROUND
This case arises from a 1984 car accident that injured King and killed her husband, Tip Edward Cobb. The accident occurred as King and her husband were driving through a portion of a Kentucky highway that was under construction. King filed a wrongful death action on behalf of her husband’s estate in 1984, alleging negligence by Kentucky Stone Company, Inc., the company in charge of the construction. Kentucky Stone was insured by Liberty Mutual. According to King, her lawsuit against Kentucky Stone was settled in 1987 for $15,000, with $5,000 paid to her lawyer at that time. King further claims that the settlement agreement required Liberty Mutual to use the remaining $10,000 to purchase two annuities, one for herself and the other for her minor stepson, Justin Cobb. The annuity payments to King and Cobb were to begin when Cobb reached the age of 18.
When Cobb turned 18 some nine years after the settlement, neither he nor King received any payments from the annuities. Shortly thereafter. King’s sister made several inquiries into the matter with Liberty Mutual. (King herself was unable to call Liberty Mutual because she does not have a telephone or access to one during business hours.) King’s sister was told that Liberty Mutual could not access the claim without the claim number, which King did not have. When Liberty Mutual continued to deny any knowledge of the settlement or the annuities, King retained a lawyer to assist her. King’s lawyer sent two demand letters to Liberty Mutual and, when the company did not respond after several months had passed, filed this lawsuit for recovery of the amounts due under the settlement agreement, for violations of KUCSPA, and for common law bad faith.
The facts as alleged by King are disputed by Liberty Mutual. It contends that although settlement negotiations clearly occurred in the underlying suit, there is no evidence as to their ultimate result. Throughout this litigation. Liberty Mutual has refused to concede the existence of a settlement. King does not have any documents regarding the settlement, except for one letter from her attorney that vaguely refers to the annuities. The files kept by the lawyers on each side in the underlying suit have been destroyed. Both lawyer’s confirmed, however, that the ease was settled and that annuities were supposed to have been purchased by Liberty Mutual. Court records further indicate that the *835original -wrongful death suit had been scheduled for trial and that jury instructions were submitted. But the trial never occurred, a fact that suggests that the case was settled.
Shortly after King filed her complaint in February of 1999, and nearly three years after King first requested what was due to her under the settlement agreement, Liberty Mutual offered $2,500 to settle. King refused the offer. Liberty Mutual subsequently stated in its initial disclosures to King that “[a]t this time. Liberty Mutual is aware of no documents to be disclosed pursuant to Fed. R. Civ. 26(a)(1)(B).” Nearly six months later, however. Liberty Mutual searched its purged files and turned over the remnants of King’s claim file. The file contained several documents discussing the settlement and the annuities that were to have been purchased. One of these letters stated that Liberty Mutual was “waiting for information the plaintiff was to produce so that we can produce the annuities agreed upon as settlement of this litigation.” A subsequent letter stated that all necessary information had been received from the plaintiff. Additionally, a note in the file states that Donna Leaman would handle the issuance of the annuities. Another letter revealed that “[t]he total settlement is $15,000 for all claims.”
Liberty Mutual employee Don Hardee, who was assigned to handle King’s case, testified in his deposition that upon receiving a demand letter from King’s attorney in 1998, he telephoned the attorney who had handled the original case for Liberty Mutual. Hardee said in his deposition that he could not recall the specifics of this conversation, but that the lawyer had told him that the underlying case “may” have been settled. Documents subsequently turned over pursuant to the magistrate judge’s order, however, demonstrate that in these phone conversations with the attorney, Hardee in fact learned that the underlying claim had been settled, and that the settlement included two annuities to be paid when Cobb reached the age of majority. King’s allegations that Liberty Mutual owed her money had thus been confirmed by Liberty Mutual’s own lawyer before King filed her lawsuit, and months before Liberty Mutual made the $2,500 settlement offer to King in early 1999.
Liberty Mutual eventually offered to pay the present value of the settlement amount identified in the recovered file, plus interest and costs. This totaled approximately $15,000. King and Cobb accepted the offer in October of 1999, but reserved the right to pursue their claims for bad faith. In April of 2001. the district court granted Liberty Mutual’s motion for summary judgment on both the statutory and common law bad faith claims. This appeal followed.
II. ANALYSIS
A. Standard of review
A district court’s grant of summary judgment is reviewed de novo. Sperle v. Michigan Dept. of Corr. 297 F.3d 483, 490 (6th Cir.2002) (en banc). Summary judgment is proper where no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). In considering such a motion, the court must view the evidence and draw all reasonable inferences in favor of the nonmoving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp. 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). The central issue is “whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52,106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).
*836B. Common law bad faith
As the district court noted, “Kentucky law adheres to a single test ‘applicable to all bad faith actions, whether brought by a first-party claimant or a third-party claimant, and whether premised upon common law or a statutory violation.’ Accordingly!)] the plaintiffs UCSPA and common law bad faith claims are analyzed together” (internal citation omitted).
C. Kentucky’s Unfair Claims Settlement Practices Act
The Kentucky Supreme Court has held that KUCSPA is intended “to protect the public from unfair trade practices and fraud,” and therefore “should be liberally construed so as to effectuate its purpose.” State Farm Mut. Auto. Ins. Co. v. Reeder, 763 S.W.2d 116, 118 (Ky.1988). KUSCPA prohibits insurance companies in Kentucky from engaging in 14 specific unfair practices. KRS § 304.12-230. King alleges that Liberty Mutual violated the following subsections:
(1) Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue;
(2) Failing to acknowledge and act reasonably promptly upon communications with respect to claims arising under insurance policies;
(3) Failing to adopt and implement reasonable standards for the prompt investigation of claims arising under insurance policies;
(4) Refusing to pay claims without conducting a reasonable investigation based upon all available information;
(6) Not attempting in good faith to effectuate prompt, fair and equitable settlements of claims in which liability has become reasonably clear;
(14) Failing to promptly provide a reasonable explanation of the basis in the insurance policy in relation to the facts or applicable law for denial of a claim or for the offer of a compromise settlement])]
Id.
Liberty Mutual contends that King’s claims “are nothing more than ones for breach of contract ... [and] there is nothing to support the idea that a breach of contract claim can be shoehorned into the UCSPA merely because the contract in question resulted from the settlement of a claim that related to a policy of insurance.” It urges us to adopt the position that once a settlement agreement is reached, the insurance company’s actions are outside the purview of KUCSPA. We decline to adopt this position, however, because the Kentucky Supreme Court has explicitly stated that KUCSPA “applies only to insurance companies and their agents in the negotiation, settlement and payment of claims made against policies, certificates or contracts of insurance.” Davidson v. American Freightways, Inc. 25 S.W.3d 94. 98 (Ky.2000) (emphasis added).
Furthermore, the statute by its own terms applies to “any unfair or deceptive act or practice in the business of insurance.” KRS 304.12-010. We decline to hold that payment pursuant to a settlement agreement by an insurance company falls outside the scope of “the business of insurance.” Until the claim is finally settled and paid in full, we conclude that the processing of the claim is not final and the transaction is still covered by KUCSPA.
Third party claimants are entitled to bring a cause of action for damages when an insurance company violates any of the provisions of KUCSPA. State Farm v. Reeder, 763 S.W.2d 116 (Ky.1988). Under Kentucky law, “an insured must prove three elements in order to prevail against *837an insurance company for alleged refusal in bad faith to pay the insured’s claim: (1) the insurer must be obligated to pay the claim under the terms of the policy; (2) the insurer must lack a reasonable basis in law or fact for denying the claim; and (3) it must be shown that the insurer either knew there was no reasonable basis for denying the claim or acted with reckless disregard for whether such a basis existed.” Wittmer v. Jones 864 S.W.2d 885. 890 (Ky.1993).
A plaintiff seeking punitive damages for bad faith must also meet an additional standard. “Before the cause of action exists in the first place, there must be evidence sufficient to warrant punitive damages.... This means there must be sufficient evidence of intentional misconduct or reckless disregard of the rights of an insured claimant to warrant submitting the right to award punitive damages to the jury.” Id. The district court in the case before us did not reach the three-part test outlined in Wittmer, but rather held that King failed to meet this threshold standard. In so doing, the district court relied on the fact that “[bjecause the plaintiffs cannot produce a copy of the alleged settlement agreement, they cannot show that the defendant deliberately faded to pay pursuant to any such agreement.” We disagree with this conclusion of the district court.
Kentucky law does not require contractual obligations to be in writing in order to be binding. Motorists Mutual v. Glass, 996 S.W.2d 437, 445 (Ky.1997) (holding that the testimony of a structured settlement specialist was alone sufficient to create a jury issue as to whether automobile insurers and an accident victim had reached a settlement). Thus, the fact that King failed to produce a written settlement agreement is not dispositive as to whether Liberty Mutual breached its obligations pursuant to a settlement with her. We conclude that there is sufficient evidence, including the lawyers’ depositions, the notes from Liberty Mutual’s files, and King’s own testimony, from which a reasonable jury could find that there was a binding settlement agreement, and that Liberty Mutual failed to pay according to its terms.
This leads us to the merits of King’s bad faith claim. To start with, we agree with the dissent’s analysis that none of Liberty Mutual’s actions in what the dissent refers to as “Chapter 1” and “Chapter 2” can reasonably be construed as more than simple negligence. With regard to “Chapter 3,” however, commencing with Justin Cobb’s 18th birthday on November 3, 1996, we believe that a genuine issue of material fact exists as to whether Liberty Mutual’s actions amounted to a reckless disregard for King’s rights under the insurance policy in question.
In our opinion, the district court erred in not recognizing that King has presented evidence in two areas that raise genuine issues of material fact concerning her claim that Liberty Mutual acted in reckless disregard of her rights under the policy settlement. The first of these areas relates to Liberty Mutual’s failure to check its purged file records until 18 months after King’s sister began inquiring about the settlement in January of 1998, 9 months after King’s lawyer first contacted Liberty Mutual in October of 1998, 9 months after the existence of a settlement was confirmed by Liberty Mutual’s own attorney in October of 1998, and 5 months after King filed her lawsuit in February of 1999. A check of the purged file records under the facts of this case seems such an obvious place to begin a conscientious search for the missing information, especially since it was this very action in July of 1999 that promptly led to the recovered *838files. We believe that a reasonable jury could find that this inexplicable delay belied Liberty Mutual’s contention-and the district court’s finding-that Liberty Mutual diligently attempted to locate documents pertaining to King’s claim. This is particularly so in light of the fact that Liberty Mutual was able to locate what was left of King’s file within a day after being ordered to do so by the magistrate judge.
The second area that we believe raises a genuine issue of material fact as to Liberty Mutual’s alleged bad faith concerns the knowledge possessed by Liberty Mutual’s employee Hardee at the time that he was in contact with King and her attorney, M. Austin Mehr. King presented proof that Hardee verified the existence of a settlement in a phone conversation that he had with Liberty Mutual’s original attorney, F. Preston Farmer, in October of 1998. This is reflected in an email message sent to Liberty Mutual’s Cleveland office that reported that, according to Farmer, King’s case had been settled and some type of annuity was to be purchased. Yet Hardee equivocated in his December 15, 1999 deposition about what he had been told by Farmer concerning the settlement, claiming that “I don’t recall him saying that the case had been settled. He thought it may have been settled, as best I recall his words.” This apparent misrepresentation, when combined with the “low ball” $2,500 offer of settlement made by Liberty Mutual in April of 1999, would permit a reasonable jury to find that Liberty Mutual had acted in reckless disregard of King’s rights under the policy settlement. In sum, we believe that there is sufficient “proof or evidence supporting a reasonable inference that the purpose of the delay [in payment] was to extort a more favorable settlement or to deceive the insured with respect to the applicable coverage” to justify sending this question to the jury. Motorists Mutual v. Glass, 996 S.W.2d 437, 453 (Ky. 1997).
Because we believe that King survives the threshold test, we turn next to the three prongs set forth in Wittmer The first prong is satisfied because a reasonable jury could find that Liberty Mutual had a contractual obligation to pay King based on the evidence submitted. Second, Liberty Mutual had no legal or factual basis for denying the claim, assuming that the jury finds that a binding settlement was reached. Nothing had changed in the intervening years to alter Liberty Mutual’s legal obligation to pay King according to the terms of the settlement. The fact that Liberty Mutual claims to have misplaced its file regarding an open obligation does not change the legal force of that underlying obligation. Finally, the evidence supporting the proposition that Liberty Mutual either knew there was no reasonable basis for denying the claim or that it acted with reckless disregard for whether such a basis existed has already been discussed in connection with the threshold test for punitive damages under Wittmer v. Jones. 864 S.W.2d 885, 890 (Ky.1993).
Our analysis thus leads to the conclusion that the district court erred in granting summary judgment in favor of Liberty Mutual. This is not to say that the ultimate outcome is foreordained, because a jury might well find that Liberty Mutual has not exhibited bad faith in regard to King’s claim. But we do believe that King has raised genuine issues of material fact the preclude the summary disposition of this case.
III. CONCLUSION
For all of the reasons set forth above, we REVERSE the judgment of the district court and REMAND the case for *839further proceedings consistent with this opinion.