The National Association of Mutual Insurance Companies (NAMIC) announced that the House Judiciary Committee held a markup on a NAMIC-supported third-party litigation funding disclosure bill on January 13 but again delayed action on the measure.
According to the announcement from NAMIC, the House Judiciary Committee’s session included discussion of a third-party litigation funding disclosure bill. However, no progress was made, and action on the measure was postponed. This update is part of NAMIC’s ongoing efforts to inform its members about federal legislative developments affecting the insurance industry and civil justice issues. The organization continues to monitor proposals aimed at increasing transparency in third-party litigation funding practices.
Third-party litigation funding has become an increasing concern in states with high levels of litigation activity. The lack of disclosure can lead to higher insurance premiums and economic costs for residents. In areas with significant trial lawyer influence, undisclosed funding often results in prolonged legal cases and increased settlement pressures on insurers. Legislative efforts at the federal level are focused on addressing these transparency gaps to ensure fairer outcomes for businesses and policyholders.
The U.S. tort system incurred costs amounting to $529 billion in 2022, translating to over $4,200 per household. These expenses represent approximately 2 percent of the gross domestic product and have grown at an average annual rate of 7.1 percent from 2016 to 2022, surpassing inflation rates. An analysis by the U.S. Chamber Institute for Legal Reform highlights how litigation practices, including third-party funding, contribute to these rising costs impacting businesses and consumers nationwide.
NAMIC functions as a trade association representing mutual property and casualty insurance companies across the United States. It advocates for policies that promote stable insurance markets, fair liability frameworks, and transparency in litigation practices while tracking federal and state legislation affecting the insurance sector.
