{"id":263,"date":"2024-12-03T15:36:55","date_gmt":"2024-12-03T16:36:55","guid":{"rendered":"https:\/\/legendsfootballcamp.com\/?p=263"},"modified":"2025-02-25T12:33:37","modified_gmt":"2025-02-25T12:33:37","slug":"jif-2024-whats-in-a-name-when-it-comes-to-legal-system-abuse-a-lot","status":"publish","type":"post","link":"https:\/\/legendsfootballcamp.com\/index.php\/2024\/12\/03\/jif-2024-whats-in-a-name-when-it-comes-to-legal-system-abuse-a-lot\/","title":{"rendered":"JIF 2024: What\u2019s In a Name? When It Comes to Legal System Abuse, A Lot"},"content":{"rendered":"
\"\"<\/a><\/figure>\n<\/p>\n

By Lewis Nibbelin, Contributing Writer, Triple-I<\/em><\/strong><\/p>\n

From \u201csocial inflation\u201d to \u201ctort reform\u201d to, simply, \u201cfraud,\u201d settling upon\u00a0uniform terminology to describe\u00a0 litigation trends that drive up costs \u2013 including insurance premiums \u2013 for all Americans is a primary challenge to addressing them, according to participants at Triple-I\u2019s 2024 Joint Industry Forum<\/a>.<\/p>\n

\u201cAs we\u2019re trying to raise awareness of this problem with consumers, \u2018social inflation\u2019 doesn\u2019t work,\u201d said discussion moderator and Triple-I\u2019s Chief Insurance Officer Dale Porfilio. Though Triple-I previously favored \u201csocial inflation,\u201d consumer testing was done that suggested a better name was needed. \u201cThat\u2019s when we landed on \u2018legal system abuse<\/a>.\u2019\u201d<\/p>\n

\u201cThe name absolutely matters,\u201d said Viji Rangaswami, senior vice president and chief public affairs officer for Liberty Mutual. \u201cWhen you talk to a legislator, whether that\u2019s in Kansas or in Washington, D.C., and you say the words, \u2018social inflation,\u2019 they don\u2019t know what you\u2019re talking about. But when you say the words \u2018legal system abuse,\u2019 you see the lightbulb go off.\u201d<\/p>\n

Louisiana Insurance Commissioner Tim Temple \u2013 a self-described \u201cunicorn\u201d among insurance regulators, given his decades-long background in the industry as an agent, broker, and company president \u2013 even renamed programs to address \u201clegal system abuse\u201d when he assumed office in January. This shift exemplifies Temple\u2019s commitment to using his experience to shape a regulatory and statutory environment that enhances the attractiveness of Louisiana\u2019s insurance market.<\/p>\n

\u201cWe\u2019re getting more buy-in now, people understand it,\u201d Temple said. \u201cThat\u2019s part of transparency \u2013 talking about what it truly is.\u201d<\/p>\n

Clear communication is key<\/strong><\/p>\n

Opaque, ill-defined language empowers predatory \u201cbillboard attorneys<\/a>\u201d to define these terms themselves, contributing to pervasive policyholder distrust, said Jeff Sauls, Farmers Insurance head of legislative affairs.<\/p>\n

\u201cThere\u2019s this perception of the insurance industry amongst the public \u2013 and plaintiffs\u2019 attorneys help portray this \u2013 as a high-margin business,\u201d he said, when, in reality, \u201cwe compete with grocery stores for who can make less money in an average year.\u201d<\/p>\n

Attorney advertising \u2013 estimated to total over $2.4 billion<\/a> across the U.S. last year \u2013 has commandeered the messaging once associated with insurers, noted Temple, who encouraged the industry to \u201ctake back that high ground\u201d of providing \u201cdependability and stability during the worst days of people\u2019s lives\u201d without overuse of brand mascots or jingles.<\/p>\n

\u201cWe have to remind the public why we exist,\u201d Rangaswami added. \u201cWe want to pay claims as expeditiously as possible\u2026. We\u2019re on the side of the consumer, whereas the plaintiffs\u2019 attorney is often on their own side or the investor\u2019s side.\u201d<\/p>\n

Third-party litigation funding<\/strong><\/p>\n

With her reference to \u201cinvestors,\u201d Rangaswami took aim at a little-known, rapidly growing practice called third-party litigation funding<\/a> (TPLF), in which investors with no stake beyond potential profit step in to fund lawsuits against corporate entities perceived as having deep pockets. As of last year, such investors retained an estimated $15.2 billion<\/a> in assets for U.S. litigation alone.<\/p>\n

Only a handful of states require mandatory disclosure of TPLF, which enables hedge funds and other foreign funders to compound and profit from protracted and even fraudulent U.S. court cases. Secrecy surrounding TPLF prevents insurers and regulators from identifying, let alone mitigating, the risks of increased costs and time to resolve claims disputes.<\/p>\n

Preventing adversaries to the U.S. from exploiting TPLF to influence settlement outcomes and access sensitive defense information is another concern.<\/p>\n

\u201cWe\u2019re looking at TPLF as potentially exacerbating national security risk,\u201d said Jerry Theodorou, policy director for finance, insurance, and trade at the R Street Institute. \u201cMost people don\u2019t know what TPLF is and the way it can insidiously impact the economy, our businesses, our jobs.\u201d<\/p>\n

Everyone is affected<\/strong><\/p>\n

Legal system abuse costs the highly litigious states Louisiana and Georgia over 175,000<\/a> jobs combined and thousand-dollar \u201ctort taxes\u201d for each resident per year, earning both states recurring spots on the American Tort Reform Foundation\u2019s list of \u201cJudicial Hellholes<\/a>.\u201d They also rank among the least affordable places for auto and homeowners\u2019 insurance by the Insurance Research Council \u2013 an affiliate of The Institutes<\/a>, like Triple-I.<\/p>\n

Louisiana recently enacted a law enforcing some oversight over TPLF, Temple noted, as well as repealed a unique \u201cthree-year rule\u201d that impeded actuarially-sound underwriting. But as the state\u2019s bodily injury claims climb well over the national average, more reform is needed to return insurance profitability to the state.<\/p>\n

\u201cOne thing I would look to is importing some of the good things Florida has done,\u201d Theodorou suggested, explaining that reform curtailing contingency and one-way attorneys\u2019 fees \u201chave brought down the number of lawsuits against insurance companies by 24 percent<\/a>\u201d for the second consecutive three-quarter period. \u201cNotice of intention to sue is also down by double digits. It\u2019s working, so let\u2019s learn from that.\u201d<\/p>\n

Considering the fact that the former \u201cposter child<\/a>\u201d for legal system abuse generated over 70 percent of all homeowners insurance litigation nationally in 2022 \u2013 despite accounting for only about 15 percent of total homeowners claims \u2013 Florida\u2019s reduced premium growth and nine new property insurers this year reveal the likely efficacy of such reforms in other states.<\/p>\n

Education and coalition building<\/strong><\/p>\n

But such reform requires advocacy, which requires consumer education and coalition building across diverse stakeholder groups, Rangaswami pointed out.<\/p>\n

Fixing\u00a0\u201can economy-wide problem,\u201d she explained, requires an \u201ceconomy-wide coalition.\u201d<\/p>\n

The end goal is not a \u201ctilted playing field,\u201d Sauls emphasized. \u201cWe\u2019re trying to get to a place where we are all on level footing, without being exploited by plaintiffs\u2019 attorneys.\u201d<\/p>\n

Legal system abuse \u201cis going to be a pressure point for the industry moving forward,\u201d stressed Fred Karlinsky, shareholder and global chair of Greenberg Traurig, LLP. \u201cNo state is immune from what we\u2019ve seen in Florida.\u201d<\/p>\n

Karlinsky emphasized\u00a0that spreading normalization of \u201cnuclear\u201d (over $10 million) and an emergent class of \u201cthermonuclear\u201d (over $100 million) verdicts will stall reform in newly targeted states.<\/p>\n

Rangaswami pointed out that not all the news has been bad.<\/p>\n

\u201cWe had some great wins in 2024,\u201d she said, citing Florida\u2019s improved insurance market and legislation introduced at both the federal<\/a> and state levels as movement in a promising direction. \u201cBut we have to keep this momentum up.\u201d<\/p>\n

Learn More:<\/em><\/strong><\/p>\n

Triple-I Issues Brief: Legal System Abuse<\/a><\/p>\n

Agents Play Critical Role in Navigating Impacts of Legal System Abuse on Customers<\/a><\/p>\n

Legal System Abuse\/Social Inflation Adds Costs and Challenges for US Casualty Insurance: AM Best<\/a><\/p>\n

Who\u2019s Financing Legal System Abuse? Louisianans Need to Know<\/a><\/p>\n

Legal Reforms Boost Florida Insurance Market; Premium Relief Will Require More Time<\/a><\/p>\n

How Georgia Might Learn From Florida Reforms<\/a><\/p>\n

U.S. Consumers See Link Between Attorney Involvement in Claims and Higher Auto Insurance Costs: New IRC Report<\/a><\/p>\n

Inflation Continues to Drive Up Consumers\u2019 Insurance Costs<\/a>Triple-I Launches Campaign to Highlight Challenges to Insurance Affordability in Georgia<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

By Lewis Nibbelin, Contributing Writer, Triple-I From \u201csocial inflation\u201d to \u201ctort reform\u201d to, simply, \u201cfraud,\u201d settling upon\u00a0uniform terminology to describe\u00a0 litigation trends that drive up costs \u2013 including insurance premiums \u2013 for all Americans is a primary challenge to addressing them, according to participants at Triple-I\u2019s 2024 Joint Industry Forum. \u201cAs we\u2019re trying to raise […]<\/p>\n","protected":false},"author":1,"featured_media":265,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[14],"tags":[],"_links":{"self":[{"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/posts\/263"}],"collection":[{"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/comments?post=263"}],"version-history":[{"count":2,"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/posts\/263\/revisions"}],"predecessor-version":[{"id":266,"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/posts\/263\/revisions\/266"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/media\/265"}],"wp:attachment":[{"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/media?parent=263"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/categories?post=263"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legendsfootballcamp.com\/index.php\/wp-json\/wp\/v2\/tags?post=263"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}