Over the past four decades, Robert “Bob” Hartwig has championed the critical role the insurance industry plays in the nation’s economy. So, when the former Chief Economist and President of the Insurance Information Institute, who also serves on the Federal Reserve Board’s Insurance Policy Advisory Committee, perceives something not in the industry’s best interests, he cannot hold back.
Executive Summary
Insurers have long blamed third-party litigation funding firms for fueling sky-high jury verdicts, yet some insurers sell a litigation insurance policy monetized in part by the same firms. And now, carriers and brokers are reportedly set to invest in TPLFs too. What gives? Journalist Russ Banham interviewed various players to find out.This “something” is judgment preservation insurance (JPI), a bespoke insurance policy covering the possibility a successful judgment at the trial court level will be overturned on appeal. In July, Carrier Management published a feature article citing a series of giant losses sustained by JPI insurers. The article noted that third-party litigation financing firms, long demonized by the insurance industry for contributing to nuclear verdicts in the eight-figure and nine-figure range, are financing the insurance premiums for many JPI policies and even monetizing a portion of the settlement or judgment.
